still don't get how GBTC will ever be attractive again? with this negative premium no one will buy and wait 6 months, pretty pointless? so its all up to external markets to pump the price up, and then the premium/gbtc relationship will change?
if there is positive news on GBTC becoming an ETF or redemptions being allowed, this would imply the NAV would likely be returning to par. Would expect to see cash n carry show up as GBTC returns to par value - other leg of this trade would surface as a short on CME. Once the NAV returns to par, shorts get unwound, this would be a positive for the market.
"However this current Act ends, it’ll market the end to the current cycle. And perhaps move us one step closer to the next."
mark?
Great summary on Grayscale effect. Thank you for this Ben!
still don't get how GBTC will ever be attractive again? with this negative premium no one will buy and wait 6 months, pretty pointless? so its all up to external markets to pump the price up, and then the premium/gbtc relationship will change?
if there is positive news on GBTC becoming an ETF or redemptions being allowed, this would imply the NAV would likely be returning to par. Would expect to see cash n carry show up as GBTC returns to par value - other leg of this trade would surface as a short on CME. Once the NAV returns to par, shorts get unwound, this would be a positive for the market.
Good summery.
Still burning question in my head (been burning for a several months) is where will be the positive carry for the next bull cycle.
A bull run (real and sustainable) needs a positive carry.
Not sure where it comes from but if we’ll see ETH CME MINI volume and OI grow it’ll probably come from ETH cash staled ETF approvals.
If not I’m not really sure where the positive carry can come from.
Interesting theory.
What was the cash n carry in 2016-17? Kimchi premium I don't think happened until late-2017
We had a GBTC premium since Greyscale inception but basis was in a discount by late FEB 2021 for the first time ever.
Basically crypto have been a positive carry trade for years.
I think what really changed this bull market we had CME BTC contracts which enabled large pools of capital to capitalize this carry trade.
I also should add that BTC price action from the last week of September 2021 till ATH was accompanied by a CME premium.