Bitcoin Collapse! Initial Investors of Grayscale Bitcoin Investment Trust Down 87%

Think the Stock Market Sell-Off Cost You A lot. Imagine Paying $40,000 for Bitcoin When It Was Trading For $20,000

A large number of investors got caught up in Crypto-mania which created a mini-bubble that now has not only popped but has left Bitcoin after a steady nose-dive to just $4,000 leaving nursing losses of more than 87 percent.

By James DiGeorgia

The Dow Jones is off about 10% from its peak. If you think that’s a big loss consider that bath taken by initial investors in the $1 billion Grayscale Bitcoin Investment Trust.

Literally the day before Bitcoin’s epic crash began on December 8, 2017 investors jumping into the “red hot” Grayscale Bitcoin Investment Trust which was trading 100% over its net asset value, which means they were paying $40,000 for Bitcoin that were trading near $20,000 in the spot market that is now trading for just over $4,300.

The premium markup was driven up by too many people jumping in that day because the trust couldn’t buy enough Bitcoin in the open market at the almost $20,000 market price and wound up raising the issue price so high they ended up paying a 100% premium, i.e., $40,000 each.

The rush to grab shares of the Grayscale Trust was in part propelled by the fact that it was one of the few ways to buy a Bitcoin equivalent that was regulated U.S. institutional investors to gain exposure to cryptocurrencies. A large number of investors got caught up in Crypto-mania which created a mini-bubble that now has not only popped but has left Bitcoin after a steady nose-dive to just $4,000 leaving nursing losses of more than 87 percent.

Buying the Grayscale trust is still expensive;  Its Bitcoin assets are valued at more than 9% of the current spot price of Bitcoin.