In line with a recent data analysis report by on-chain analytics resource CryptoQuant, the price premium of the GBTC [Grayscale Bitcoin Trust] just hit its lowest since April 2019. Grayscale has made the headlines frequently this year as a part of record BTC purchases and record demand, but despite the inflows, BTC/USD has not continued to realize.
Since the starting of this month, the Trust’s purchase premium is at around $6.50 USD, having previously been as high as $40 USD over the course of its existence. This historically coincides with meandering price direction, while large premiums equal large upside moves for Bitcoin.
Earlier in the month of December, a fanatical article in technology magazine Hackernoon revealed the phenomenon as being tied to releases of GBTC shares that are subjected to a customary lock-up.
Once they’re released, Bitcoin tends to shoot higher as users put their profits back to BTC, while the time preceding such events corresponds to a scarcity of price action.
“What’s important to understand is once these higher prices and premiums are realized after unlocking, the price goes on to consolidate. This lets the premium shrink again before its next unlocking event,” Hackernoon explained.
With subsequent unlocking set for 3rd Feb., anticipation should be building for a continuation of the Bitcoin Bull Run.
“These voids permit premiums to shrink again a bit like the 9x before,” the article continued, correctly predicting the worth behavior for the last half of January.
“And it’ll keep shrinking until subsequent unlocking. Due to this, I expect the price to either consolidate or sag.”
While on the other hand, Grayscale meanwhile continues to expand its offerings as institutional interest broadly shows no signs of slowing for either Bitcoin [BTC] or altcoins.
This week saw its Ethereum Trust reopen after being closed since Dec., while 25th Feb. will see Grayscale sponsor a cryptocurrency-focused event the Bloomberg Cryptocurrency Summit.