The total value of Grayscale’s digital assets under management (AUM) have dropped over $11 billion since May 13, down to $41.27 bn in total.

The latest correction in the crypto market has resulted in a sizeable dip in Grayscale‘s digital assets under management (AUM). The company now has $41.27 billion worth of crypto AUM, down from $53.1 billion on Mary 13 2021.

According to an official announcement on Twitter, the firm has nearly $29 billion worth of bitcoin – a total of about 650,000 BTC.

Grayscale premiums continue trading at a discount

The Grayscale Bitcoin Trust (GBTC), from the crypto asset manager Grayscale, is the largest US investment vehicle for buying bitcoin via a stock exchange. The Grayscale discount represents the difference between the price of the underlying BTC and the  implied value from the price of the trust’s shares.

A closely tracked ratio in cryptocurrency markets known as the  “Grayscale premium” flipped to a discount earlier this year, and it  widened last week to a gaping 21%, the highest on record. Since then, the gap has narrowed modestly to below 19%.

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Until recently, the GBTC trade looked different, such that wealthy or institutional players could profit by purchasing the GBTC at the trust’s net asset value (NAV), and selling it on the open market after a 6 month lock-up period. This would lock in gains from bitcoin’s market appreciation as well as the GBTC premium (depending on market conditions). However, this arbitrage opportunity has since been turned on its head now and seemingly weighs down on bitcoin as Grayscale fully commits to transitioning the trust to an ETF.

One bet traders could be looking at right now is the potential discount reversion, in the event that Grayscale received approval from the US Securities and Exchange Commission (SEC) to convert the trust into an ETF. As the overhang from the last six months comes to market, the gap could widen further pending an update on the ETF approval.

Digital Currency Group (DCG), which is the parent company of Grayscale authorised the purchase of up to $750 million worth of shares of GBTC on May 3.

Bitcoin has been on a down-trend for 35 days, correcting 41% since the $65,000 all time high on April 14.

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