The latest plunge — to lows of $44,500 — suggests that bearish momentum is beginning to seep into the market.
All of this comes against a backdrop of a strengthening dollar, and a decline in the value of other risky assets. The Nasdaq has been on a losing streak in recent trading sessions too, with Tesla a notable casualty.
Grayscale Bitcoin Trust Tumbles
In another alarming development, the premium seen in the Grayscale Bitcoin Trust has all but evaporated over the past few days — with data suggesting that it’s now trading at a discount for the first since 2017. Bloomberg Intelligence’s senior ETF analyst Eric Balchunas was quoted as saying:
“This is panic or profit-taking selling. It’s almost like the price of GBTC is an amplified version of Bitcoin price.”
Indeed, the current state of GBTC is a stark contrast to the box office performance seen in December, when investors couldn’t get enough of the trust. Demand heightened to such an extent that some institutions paid 40% more for indirect exposure to the cryptocurrency than Bitcoin was actually worth.
In other developments, JPMorgan has suggested that investors should allocate up to 1% of their portfolios in Bitcoin — arguing that this would serve as an effective hedge against fluctuations in the value of commodities, stocks and bonds.