A drop in Grayscale’s Bitcoin Trust (GBTC) premiums could spark a bullish rally to $100,000, says a prominent industry analyst.
According to a tweet by Bloomberg Intelligence senior commodity strategist Mike McGlone, GBTC’s premium flipped into the negative range following bitcoin’s price pullback to $43,000. McGlone says the negative premium has historically signaled a bullish indicator for bitcoin, with a price run to $100,000 possibly in play.
The negative premium indicates that shares in Grayscale’s flagship product are trading below their “net asset price (NAV),” allowing institutional buyers to purchase GBTC at a relative discount. McGlone noted that similar market conditions have led to a price rally for bitcoin, with the last occurring in March 2020.
However, analysts have claimed a difference in Grayscale’s premium flipping this time around, including an increase in competition. Grayscale is also expected to lower its management fees following the release of new offerings in January.
Galaxy Digital co-founder Mike Novogratz also questioned the potential for arbitrage on the platform, noting that investors could sell BTC in order to purchase the discounted GBTC.