Crypto Markets Today: Record Grayscale Bitcoin Trust Discount Widens Industry Woes

Shares of the world’s largest bitcoin fund, Grayscale Bitcoin Trust (GBTC), hit a record-high discount rate of nearly 50% relative to the price of bitcoin (BTC) on Thursday.

This article originally appeared in Crypto Markets Today, CoinDesk’s daily newsletter diving into what happened in today’s crypto markets. Subscribe to get it in your inbox every day.

Bitcoin (BTC): The largest cryptocurrency by market capitalization was trading around $17,200, up 2.2% in the past 24 hours. BTC was hovering below the $17,000 mark earlier in the day but then jumped around 1:20 p.m. ET to trade as high as $17,293. Equity markets also turned green, with the S&P 500 index closing up 0.75%.

Ether (ETH): The second-largest cryptocurrency in market value also turned green, recently jumping 3.8%. The rally came after Ethereum developers determined the network’s next hard fork, called “Shanghai,” will have a target release time frame of March 2023. This upgrade will include code known as EIP 4895 that will allow Beacon Chain staked ETH withdrawals. Ether fell 17% last month, breaching an ascending trendline connecting June and October lows.

Wave (WAVES): The native token of the Waves blockchain was trading down 8.8% to $2.10 after South Korea-based exchange Upbit warned its users against investing in WAVES. WAVES is a digital asset used as collateral for USDN, a stablecoin aiming to peg its value to 1 USD with an algorithm. Currently, the value of USDN is not properly linked to $1 dollar, according to Upbit.

By Glenn Williams Jr.

The three-month rolling, annualized basis for BTC remains below zero, reducing the incentive for traders to place market neutral carry trades.

When the basis is positive, traders are inclined to simultaneously buy bitcoin in spot markets and sell BTC in futures markets, pocketing the difference in yields. The same holds true for ether (ETH), whose three-month basis has been below zero since Nov 12. Bitcoin’s chart highlights recent price inelasticity. Since Dec. 1, prices have moved a total of .001%.

Ultimately, this market favors investors with long-time horizons and significant comfort in BTC’s valuation. Friday’s Commitment of Traders (COT) report will provide insight into the degree to which institutional comfort may be shifting.

Read the full technical take here.