Why is Wall Street becoming less interested in Grayscale’s Bitcoin Trust?

Why is Wall Street becoming less interested in Grayscale’s Bitcoin Trust?


There is a reason why Grayscale Bitcoin Trust (GBTC) emerged as a benchmark to measure institutional interest in Bitcoin (BTC).

Grayscale no longer the only option for investors

The digital currency investment product was among the only ones that offered hedge funds, endowments, pension funds, and family offices a way to gain exposure to Bitcoin without needing them to own the digital asset themselves.

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Therefore, a rising capital inflow into GBTC — such as the one reported last year, wherein Wall Street investors deposited about $18.2 billion in the fund — served as a metric to gauge growing institutional interest in the crypto sector. Conversely, a declining capital inflow reflected institutional withdrawal or profit-taking, like the one happening since the first quarter of 2021.

On-chain analytics service Skew reported Thursday that GBTC stopped attracting fresh investments after February 2021. The capital inflows paused right when GBTC started trading at a negative premium to its net asset value, or NAV. NAV represents the underlying market

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