Grayscale holds a total amount of 650380 BTC which equal around $24.73B! That's about 3% of the total market cap of Bitcoin. I explained Grayscale in an article here, but I will explain a few things again in this post.
What's Grayscale again? And why are institutional investors using it?
"Grayscale Bitcoin Trust is a traditional investment vehicle with shares titled in the investors name, providing a familiar structure for financial and tax advisors and easy transferability to beneficiaries under estate laws."
In other words, this means institution can invest into bitcoin, and other crypto, without even having any real BTC. They don't buy them on exchanges, have no private keys therefore they don't need to keep them safe. Besides it's regulated like a stock giving tax and regulation advantages.
There is "no real deal", that's why Tesla, SpaceX and MacroStrategy gained respect in the eyes of the cryptoscene because all of them took a real BTC investment.
Premium or discount?
The "Premium" is the price difference of the Grayscale Bitcoin Trust and the real Bitcoin price. The share value is calculated on supply & demand, like the the BTC price, but it's unlike BTC calculated on OTC prices.
As you can see in the picture, the average premium was 13% and the peak was about 40% in the last bull run. In explanation: Buyers were willing to pay +40% of the real BTC price. Right now, July 28th, the premium is a discount of 6.67%. In clear words, institutional investors could buy BTC for 6.67% off the original BTC price - but they don't want to.
In my eyes this is a huge factor for the movement of our beloved Bitcoin. If they don't want to invest, the spot market has no pressure at all****, or less pressure. The spot market moves the market in any direction, up or down, the future trades just accelerates this movement.
In conclusion: Until the premium is negative, there will be less buying pressure from whales. This is of course a fraction of the overall spot trading, but 3% is very much in a decentralized system. All in all I'm still positive minded because you can see a positive trend in the charts.
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