The price of Grayscale Bitcoin Trust, which tracks the bitcoin BTCUSD, +2.68% market price, is notably up 7.31%, compared to other cryptocurrencies today.
“GBTC was underperforming BTC quite a bit during the FTX collapse, now is correcting up those over-dumped GBTCs to match up, in other words, the parallel was broken last week and now converging back,” said Youwei Yang, chief economist at BTCM, a crypto mining company, to MarketWatch.
Last week, the price of bitcoin went from around $ 19,000 on Nov 8 to around $ 16,000 by the end of the week after the news of FTX, the crypto exchange led by Sam Bankman-Fried, came out. The price of bitcoin is currently at $ 16,920. Similarly, the price of GBTC also hit record lows last week, diving 12.5% to $ 10.55.
“I believe the answer is simple. Ark Investment Management purchased 315,259 shares worth about $ 2.8 million in the Grayscale Bitcoin Trust (GBTC), the firm’s first purchase in almost 18 months. The decision comes as Grayscale’s NAV discount increased to over 36%,” said Ryan Shea, crypto economist at Trakx.
“The move probably reflects a desire to increase exposure to Bitcoin based on the assumption that following the failure of Sam Bankman-Fried’s two crypto firms – Alameda Research and FTX – the worst of the crypto winter is over and buying Bitcoin at such a large discount is the most profitable way to express that bias.”