Reviewing the premium situation of 14 grayscale cryptocurrency trusts, what investment opportunities exist?

Written by: Qin Xiaofeng, Odaily Planet Daily

Last night, Grayscale won its lawsuit against the U.S. Securities and Exchange Commission (SEC), with the court finding the SEC's reasons for rejecting the Bitcoin spot ETF insufficient. Although there is still a long way to go for a final victory, Grayscale's brief win has undoubtedly boosted market confidence.

Stimulated by the positive news, Grayscale's crypto trusts have also gained favor among investors. According to data from finance.yahoo, the trading volume of Grayscale Bitcoin Trust (GBTC) reached 20 million shares yesterday, the highest level since the crypto market crash in June 2022; the GBTC discount rate narrowed to 18.06%, marking the lowest value this year.

Fineqia research analyst Matteo Greco commented, "The significant narrowing of Grayscale's GBTC negative premium indicates a greatly increased likelihood of future ETF spot approval in the U.S., prompting investors who believe ETFs will be listed in the future to purchase GBTC at a substantial discount."

In fact, many may not have noticed that this year, several Grayscale crypto trusts have seen their discount rates shrink and premium rates expand. This is influenced both by the upward trend in the crypto market and the increased recognition from traditional financial markets, leading to a rise in buying pressure. A significant reduction in the discount rate means that purchasing Grayscale trust products during the same period yields returns far exceeding those from buying crypto spot.

According to statistics, among the 14 crypto trusts under Grayscale, only 7 are currently in a discount state—down from 11 at the beginning of this year, with 4 products transitioning to a positive premium (XLM, MANA, ZEN, and BAT) over the past 8 months, while the discounts of the other seven products continue to narrow.

Data shows that in mid to late December last year, various cryptocurrencies reached their maximum discounts, for example, BTC hit -48.89% on December 14, and ETH recorded -59.61% on December 30. After mid-June, as many traditional institutions like BlackRock applied for Bitcoin spot ETFs, Grayscale products became popular, with multiple products' discounts beginning to narrow and premiums starting to expand. Especially after Grayscale's victory last night, both BTC and ETH discounts hit new lows for the year, at 18.06% and -30.14%, respectively.

The performance of other Grayscale products varies, with key points as follows:

ETC Trust (ETCG) had a discount of 76.69% at the beginning of the year, reaching a minimum of -50.49% last night, maintaining a "steady" performance throughout the year, consistently ranking last among Grayscale products in terms of discount.

BCH and LTC, both belonging to POW mining, have performed better than BTC this year, which is also reflected in the premiums of Grayscale products. BCH Trust (BCHG) rose from -56.98% at the beginning of the year to -5.56% (July 4); it then experienced a significant decline as BCH prices corrected sharply, with BCHG's discount dropping to a minimum of -42.5% (August 4); LTC Trust (LTCN) saw its discount decrease from 65.23% at the beginning of the year to a peak of 19.03% (August 30), comparable to BCHG's discount level.

ZEC Trust (ZCSH) recorded two premiums on July 4 and August 3, at 4.65% and 16.02%, respectively.

XLM Trust (GXLM) reversed its downward trend at the end of January, shifting from a discount to a premium, and then consolidated below 10% for over four months, ultimately experiencing an explosion in June, with the premium rate continuously climbing, peaking at 417.75% (July 1), and currently maintaining around a 150% premium.

ZEN Trust (HZEN) began to show premiums after June, with the highest point occurring on July 21 at 47.89%.

BAT Trust (GBAT) maintained a discount of around 40% in the first half of the year, but began to gain momentum in late June, with the premium rising to a maximum of 42.46% (July 1).

LINK Trust (GLNK) has performed steadily throughout the year, consistently maintaining a positive premium, peaking at 251.35% (July 4).

MANA Trust (MANA) began to show premiums in March, reaching a high of 158.58% (July 20), and currently maintains a premium of over 50%.

FIL Trust (FILG) has maintained a 109% premium since the beginning of the year, remaining stable, with a peak increase to 783.05% (July 14).

LPT Trust (GLIV) began to show premiums after May, peaking at 26.7% (July 6), but then saw a significant decline, currently at a 30% discount.

Solana Trust (GSOL) is somewhat unique; it was allocated to investors in November 2021 but only began supporting OTC trading in April 2023. According to data from Grayscale's official website, GSOL had a premium of 144.17% on its first day of trading on April 28, and has since maintained a premium of over 1x, peaking at 356.52% (August 15), currently at a 270% premium.