Share Price Of World's Crypto Fund Dives 39%

The world’s largest cryptocurrency fund has become embroiled in the turmoil swirling around the troubled sector, in a further sign of waning enthusiasm for digital assets, Steve Johnson reported for the Financial Times.

Photo Insert: The share price of the $10.5-billion Grayscale Bitcoin Trust (GBTC), which owns 3.5 percent of the world’s bitcoin, has plummeted to a 39 percent discount to the value of its underlying assets.

The share price of the $10.5-billion Grayscale Bitcoin Trust (GBTC), which owns 3.5 percent of the world’s bitcoin, has plummeted to a 39 percent discount to the value of its underlying assets as investors have embarked on an increasingly desperate scramble to exit.

Johnson wrote that the blowout means investors in the trust have suffered an 83 percent loss since bitcoin peaked in November 2021, outstripping the 74 percent slide in the value of bitcoin itself.

Confidence in digital assets has been sideswiped by the implosion of crypto exchange FTX, the fallout from which is rippling through the near-$1tn industry due to the complex and often opaque linkages between major players.

These fears struck closer to home for Grayscale on Wednesday when crypto broker Genesis Trading, which originated more than $50 billion worth of loans last year, suspended redemptions and originations of loans at its lending arm after suffering financial contagion from the failure of Three Arrows Capital, the Singapore crypto hedge fund that filed for bankruptcy in July.

Grayscale and Genesis are both subsidiaries of Digital Currency Group, a Stamford, Connecticut-based venture capital company.

Genesis acted as an authorized participant to GBTC, responsible for issuing new shares, until last month when Grayscale launched an in-house broker-dealer, Grayscale Securities.

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