Bitcoin (BTC) could be in a bullish trend of $ 100,000 the next time a classic institutional signal replicates its historical trend.
In a tweet on March 4, Mike McGillon, chief trading strategist at Bloomberg Intelligence, said that those looking to understand what bitcoin holds next should take a look at the Grayscale Bitcoin Trust (GBTC).
Negative premium “March may refer to $ 100,000”
When Bitcoin fell to $ 43,000 and continued to fall below its all-time highs thereafter, the so-called “premium” over GBTC turned negative.
This means that GBTC shares are trading below their net asset price (NAV) – institutional buyers can buy at a discount. In the old days, such incidents were rare and indicated subsequent price increases.
Negative premiums were also seen in March 2020 when a bullish cycle began that pushed BTC / USD from $ 3,600 to $ 58,300.
“The #Bitcoin Trust grayscale discount could refer to the month of March as $ 100,000,” McGlone wrote.
“Bitcoin spreads at the end of February on US regulated exchanges exhibit a tough pricing rule if history suggests evidence of how a new cryptocurrency is performing.”
GBTC premium in relation to BTC / USD chart. Source: Mike McGlone / Twitter
At the time of writing on Friday, GBTC’s premium is actually lower than at any time since its inception in 2017, at -13%.
Unlike last year, performance may be affected by other factors. The competition between them is this: GBTC now needs to fight for market dominance along with exchange-traded funds (ETFs) that may enter the market in the near future.
According to Cointelegraph, Grayscale is expected to cut its management fees after the new offers take effect from January.
Grayscales (GBTC) has a market cap of $ 30 billion. The US Bitcoin Purpose ETF (BTCC / CN) is C $ 454 million. “It’s been six days,” said Jim Bianco, founder of the macro analysis research firm Bianco, last week.
“By no means do you see that GBTC’s $ 30 billion in sales is enough to push NAV to passive registration, so only $ 400 million is coming into BTCC.”
Bianco added that prices have increased from two to four times in previous periods of discounting.
Shades of gray and competitors outperform gold
Enthusiasm for the possibility of further profits still permeates the Bitcoin ecosystem: Michael Sonnenshin, himself a Grayscale CEO, told McGlone that the flow of gold itself represents a “mature” opportunity for cryptocurrencies.
“We have no doubt that it is no coincidence that the fourth quarter of 2020 saw one of the largest outflows recorded from gold investment products, at a time when Bitcoin has already broken through and hit some of its new highs.” He announced this on February 25 at the Bloomberg investment summit.
“ Of course, this story about Bitcoin as a digital gold or digital store of value, a fairly widespread story right now about the investment community, and then thinking about the popularity of grayscale products or just the ability to access digital assets in the form of a security, I think. she really represents. Market demand volume. ”
This time, he reiterated that this scene has little to do with 2017 and the launch of the first institutional Bitcoin products.