Bitcoin Bull Market: Institutional BTC Premium Reaches 37 Percent on Grayscale


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Institutional appetite for bitcoin (BTC) appears to be growing as BTC trading on the Grayscale Bitcoin Trust (GBTC) clears $11,600. This 37 percent premium comes as spot trading on the asset holds above $8,500 with several analysts predicting a new all-time high (ATH) for BTC before the end of 2019.

Institutional Bitcoin Hype on the Rise

While BTC trading on the spot market has experienced a slight decline, institutional interest seems to be on the rise. GBTC is currently at $11.44 per share, and with each share worth about 0.00098247 BTC, Grayscale institutional clients are buying BTC at $11,644.

This figure represents a 37 percent premium on the average spot market price, another indicator of growing institutional adoption. The premium also serves to solidify the argument that stronger market and technical fundamentals are creating greater hype not just among retail traders but institutional buyers as well.

One crucial question that could be asked is why these traders are spending an extra $3,000 to buy each BTC. The answer may lie in the fact that GBTC shares can be held in some individual retirement accounts (IRA). This added advantage might be part of the incentive for big money players to take up larger positions in GBTC.

Apart from the GBTC premium, Grayscale’s asset under management (AUM) is also on the rise. Back in April 2019, the world’s largest cryptocurrency asset manager announced that its AUM had crossed the $1 billion milestone.

On May 28, 2019, the company tweeted to announce that its AUM  crossed the $2 billion mark which means a more than 100 percent in asset size within the space of two months.

Bullish BTC Sentiment Continues but Pullback Expected

Generally, sentiment continues to be positive in the Bitcoin market as the top-ranked cryptocurrency looks to equal its longest-running monthly price gain in almost two years. If BTC ends May 2019 above $5,267, then it will reach four straight months in the green, a feat not achieved since mid-2017.

Despite the current bullish sentiments, there are expectations of a slight pullback given historical precedence from previous BTC uptrends.

Bitcoin’s last bull cycle in 2017 saw about eight different 30 percent pullbacks. The only significant retracement seen in this current cycle is the $2,000 flash crash that occurred in the middle of May following a massive dump on Bitstamp.

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