The GBTF story is one of the most important ones in the crypto industry. While people are focused on the FTX drama, we need to talk about other issues, and the case of the Grayscale Bitcoin Trust Fund is a great example.
We had a long period of intermediaries entering the market without any proper funding or a good long-term plan to hedge against risks.
GTBF is facing scrutiny as it tries to convince investors that it has sufficient Bitcoin holdings to justify its existence and support potential withdrawals.
However, their recent announcement that they will be offering a 50% discount on its shares makes it hard to believe that everything is fine at the headquarters.
Many intermediaries will go under
Companies like Fidelity Investment, J.P. Morgan, and BlackRock are entering the market with solid long-term strategies. They can also easily withstand the current rocky period by offsetting their risks with other investments in real estate, gold, and other traditional safer options.
Companies like Digital Currency Group and Grayscale are not as stable and start struggling during periods of uncertainty.
The current trend is obvious: retail traders and small-time investors want to move their holdings to safe and secure places. Cold wallets are trending in Google, GMX and Uniswap, enjoy a massive influx of new users, and the number of withdrawals at Binance is alarmingly high.
What it means is that companies that fail to prove that they are solvent and have sufficient assets in reserves will immediately collapse. DGC is rumored to be preparing to file for bankruptcy before the end of the year.
GTBF is disclosing information unwillingly and does not have anything solid to say to infuse some confidence in shareholders.
Grayscale needs to conduct an audit
The amount of BTC in Grayscale’s reserves is a very important metric that will define the level of trust that it will have in the nearest future. Whether people will retain their interest in working with middlemen depends wholly on whether these middlemen are trustworthy. So far, GBTF has not proven critics wrong.