Grayscale Investors Unhappy with Bitcoin Trust Markups


Grayscale bitcoin trust margins have been in the negative zone for a month now, forcing investors to write angry letters to the crypto fund

Investors at the Grayscale Bitcoin Trust (GBTC) are worried about negative markups. Bloomberg reports this with reference to a letter from one of the fund’s clients.

The Marlton family office, which owns GBTC shares, requires a tender offer to raise prices. According to the letter, the shares of the trust as of March 31 were a loss for shareholders in the amount of $ 3.1 billion. However, how many shares Marlton itself holds remains unknown.

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Starting from March 1, GBTC markups remain in negative territory. At the time of this writing, the trust’s shares are traded at a discount of -8.35%.

Source: ycharts.com

The strongest drop was recorded on March 24, when the GBTC mark-ups fell to -14.31%. The fall was the largest in the history of the trust.

Marlton argues that Grayscale has made insufficient efforts to increase shareholder value. Thus, the family office comments on recent statements by Digital Currency Group, the parent company of Grayscale, about plans to buy up GBTC shares in the amount of up to $ 250 million. However, no official announcements about the actual purchase of shares later followed.

Grayscale between two fires

Marlton also expressed “disappointment” that Grayscale’s board of directors could allow management to “squander the company’s leading market share to the detriment of GBTC shareholders.”

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At the same time, asset management fees remain “wasteful”, the family office said.

“Marlton and other shareholders will not tolerate such a clear decline in share prices,” said James Elbaor, CEO of Marlton.

Marlton’s criticism comes amid Grayscale’s pledges to stick with the plan to convert GBTC into an exchange-traded bitcoin fund (ETF). However, Grayscale emphasized that the conversion will only occur if regulatory conditions are favorable.

Read about what negative GBTC margins mean for the cryptocurrency market in the BeInCrypto article.

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Karice Dabule

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