Grayscale’s FORM 10-Q filing with the SEC shows that Grayscale Bitcoin Trust (GBTC) faced a record outflow of funds in the first quarter of 2021, with a Net investment loss (NIL) of $144.3 million. The trust’s holdings of physical bitcoins increased to 654,600, up 8% from the end of 2020. The total value of bitcoin holdings reached $38.4 billion, an increase of more than 100 percent compared to the same period last year.
The filing shows that GBTC increased its holdings in bitcoin by 17% in the first quarter of 2020, 27% in the second quarter, 16% in the third quarter, and nearly 35% in the final quarter. Given the parabolic rise in bitcoin prices, the trust believes it probably should not have increased its holdings by such a large amount in the final quarter.
Grayscale manages trusts set up for a number of different digital assets, with a total of nearly $52 billion in assets under custody. During the quarter, the Toronto-listed bitcoin ETF absorbed much of the money flow that would have belonged to Grayscale, and the competitor’s involvement has left Grayscale with the dilemma of a significant recent stock discount. As a compromise, Grayscale said in April that it had applied to convert its trust to an ETF.
Grayscale’s parent company, DCG, has been increasing its share buyback mandate in a bid to rescue GBTC from its non-stop discounting. So far, DCG has purchased $193.5 million worth of GBTC stock, with a current authorization of $750 million. The filing shows that $81.3 million of those shares were purchased in the first quarter of 2021.
Even so, GBTC remains the most popular investment vehicle for fund managers, according to the 13F filing. Many funds have increased their holdings in the stock in the last quarter, citing the ability to enjoy bitcoin exposure at a discount.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/grayscale-bitcoin-trust-posts-144-million-loss-in-q1/
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