Institutional appetite for Bitcoin (BTC) appears to be growing as BTC trading through the Grayscale Bitcoin Trust clears $11,600. This 37 percent premium comes as spot trading of the asset holds above $8,500, with several analysts predicting a new all-time high (ATH) for BTC before the end of 2019. While BTC trading on the spot market has slowed somewhat, institutional interest appears to be on the rise. GBTC is currently trading at $11.44 per share, with each share worth about 0.00098247 BTC, with Grayscale institutional clients buying BTC at $11,644. This figure represents a 37 percent premium to the average spot market price, another indicator of growing institutional adoption.
Institutional FOMO Hits Grayscale
The premium also serves to support the argument that stronger market and technical fundamentals are creating more excitement not only among retail traders but also among institutional buyers. One of the biggest questions that can be asked is why these traders are spending an extra $3,000 to buy each BTC. The answer may be that GBTC shares may be held in some individual retirement accounts (IRAs). This added benefit may be an incentive for deep-pocketed players to take larger positions in GBTC. In addition to the GBTC premium, Grayscale’s asset management (AUM) is also growing. Back in April 2019, the world’s largest crypto asset manager announced that its AUM had crossed the $1 billion mark.
Bitcoin Demand Soars in Grayscale Fund
Bitcoin is trading at over $11,000 on the Bitcoin Investment Trust (GBTC), with a 37% premium to exchanges. GBTC’s AUM alone has surpassed $1.2 billion. This week seems like a strong indicator of growing interest from accredited and institutional investors. @barrysilbert pic.twitter.com/SU87zuetch — Joseph Young (@iamjosephyoung) May 29, 2019. On May 28, 2019, the company tweeted to announce that its AUM had crossed the $2 billion mark, meaning more than 100% of its asset size was within two months. Overall, sentiment in the Bitcoin market continues to be positive as the top-rated cryptocurrency looks set to equal its longest monthly gains in nearly two years. If BTC ends May 2019 above $5,267, it will have reached four consecutive months in the green, a feat not achieved since mid-2017. 1/$BTC: Still Looking for a 30%+ Pullback?
Grayscale’s 37% Premium: What It Means for Bitcoin
Bitcoin has had 8 pullbacks +30% + the last uptrend in the market, but the average time between each pullback was 98 days. BTC had a major pullback of 26.3% on May 17th, meaning the next major pullback could be a couple of months away. pic.twitter.com/SwsNMYWNKb — Josh Rager (@Josh_Rager) May 28, 2019 Despite the current bullish sentiment, there is an expectation of a minor pullback given the historical precedent from BTC’s previous uptrends. Bitcoin’s last bull cycle in 2017 saw roughly eight 30% pullbacks. The only significant recovery seen in this current cycle is the $2,000 flash crash that occurred in mid-May following a massive Bitstamp dump.
