The last seven days have witnessed a downward slip in fortunes of many cryptocurrencies, with Bitcoin and Ethereum amongst the most affected. Bitcoin, which fell by a record-breaking price of about $10,000 in less than 24hours, entered a correction phase 48hours later but somehow is still trailing amidst rapid price volatility.
On the other hand, Ethereum has also suffered the same fate as its predecessor Bitcoin, as the cryptocurrency market bleeds. Unfortunately, the fall in the value of both cryptocurrencies has now taken its toll on both the Bitcoin Trust and Ethereum Trust of Grayscale, which is now trading at a discount for the first time.
Grayscale Ethereum Trust falls by 5% in value
Grayscale Bitcoin Trust, which had been trading at a premium since its inception, was unfortunately announced to be trading at a discount for the first time early last week. However, in a twist of turn, the Grayscale Ethereum Trust, its fortunes have taken a negative turn, as it is trading at a discount for the first time, as Grayscale announced. The Ethereum product popularly called ETHE, which had always traded at a premium of at least 5% since its inception in 2017, traded at a 5.3% discount.
The Grayscale Investment Trust’s nature means that investors buy cryptocurrencies like Bitcoin and Ethereum using the Grayscale Investment Trust program. Under their investment trust, the asset managers are expected to help the investors hold their assets and trade them on their behalf. The investment trust now sells the digital assets to their investors as regular shares, which will trade a bit higher than the average cryptocurrency price, in a bid to attract investors to the platform. The nature of the product also ensures that investors are not at the risk of losing their digital assets, as the Investment Trust bears all the risk.
Are the fortunes of Bitcoin and Ethereum affecting Grayscale Trust?
Before the dwindling in fortunes of the Investment Trust, Grayscale had handled trust affairs in the most profitable ways. The trust currently possesses about 3 Million Ethers in its portfolio, with the trust boasting about ten times that amount of Bitcoin under its coffers. However, a drop in value of the crypto asset is starting to create fears in their investors’ minds, whose assets are currently pegged at a loss as things stand.
However, the dwindling prices of both Bitcoin and Ethereum, which is expected to enter a correction phase soon, will likely correct the Grayscale Investment Trust’s fortunes and that of many other asset managers in the same status quo. The buying at the dip of both cryptocurrencies have also not aided their bounce back to fortunes, as retailers are using the opportunity to bolster their portfolio. However, many analysts believe that a bull season is approaching, and Grayscale Investment Trust is one of the many that the news will excite.