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First US Bitcoin ETF a ‘dud’ in 2021 as GBTC discount stays near record lows

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The first US-regulated bitcoin exchange-traded fund (ETF) is unlikely to trade at its underlying price, with shares of the GBTC trading discount approaching a record low.

The “bitcoin golden cross 2021” is the first US Bitcoin ETF. This fund was expected to be a big hit, but now it’s just a dud. The GBTC discount has stayed near record lows.

Institutional demand for Bitcoin (BTC) is noticeably absent towards the end of the year, as data shows the “underperformance” of the US’ first Bitcoin futures exchange-traded fund (ETF).

The ProShares Bitcoin Strategy ETF (BITO), as highlighted by markets pundit Holger Zschaepitz on Dec. 29, is currently trading at approximately 30% below its debut price.

Anticlimax concludes the year 2021 for the ProShares ETF.

The euphoria that surrounded BITO’s introduction in Q3 has faded down significantly, which is a sign of the times in terms of Bitcoin attitude.

The ETF has even underperformed the beleaguered Bitcoin spot market in 2021, having gone from record-breaking activity on its debut day to its present level.

“At least this year, the first Bitcoin futures ETF in the United States was a flop,” Zschaepitz said.

First-US-Bitcoin-ETF-a-dud-in-2021-as-GBTCBTC/USD normalized chart of ProShares Bitcoin Strategy ETF (BITO). Twitter user Holger Zschaepitz

Meanwhile, as previously reported by Cointelegraph, the Grayscale Bitcoin Trust (GBTC) continues to trade at its biggest-ever discount to Bitcoin spot price, or net asset value (NAV).

The conversion of GBTC to an ETF, which is expected to happen next year, is contingent on the tone of US regulators toward spot-based products, which have yet to be introduced.

1640860744_68_First-US-Bitcoin-ETF-a-dud-in-2021-as-GBTCChart of GBTC price vs. holdings vs. premium. Coinglass is the source of this information.

Stocks are still at eerie all-time highs.

While critics call the GBTC discount “extremely alarming,” investor behavior does not all hint to disinterest when it comes to Bitcoin.

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Morgan Stanley increased its GBTC holdings this month and last, indicating that longer-term sentiment is still positive.

As the year comes to a close, the $SPX is approaching a 92-year log-scale resistance line, which, since it is based on the index’s 1929 and 2000 peaks, has the potential to be a significant barrier. pic.twitter.com/khK1e09vCA Reuters

December 28, 2021 — PiQ (@PriapusIQ)

Macro markets, on the other hand, have certain unique features. The S&P 500 is at all-time highs, defying a trendline that has served as topside resistance since its inception over a century ago.

All is not as it appears under the surface, according to warnings issued this week.

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The “gbtc premium” is the percentage of a GBTC share that will be paid in Bitcoin. The discount has been near record lows for some time now, and it seems like there is no end in sight.

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