The Premium on Grayscale’s GBTC and ETHE Falls to Their Lowest Level Ever

Funding rates have also normalized to levels not seen for almost a month. But it is a “spot driven market,” and “we can pump on high rates and dump on low rates.”


After the brutal beginning of the week, the cryptocurrency market steadied and has started to record some greens.

The price of Bitcoin is hovering around $52,000 (+5%), and Ethereum is trading above $1,600 (-1.6%) with a total market cap holding at about $1.512 trillion as the market tries to lift off yet again.

With the latest pullback in the market and billions of dollars liquidated, the funding rates that keep perpetual contract prices in line with spot markets have normalized as well. Bitcoin funding rates have been trending further down to reach the levels not seen for almost a month.

“Bitcoin funding rates close to neutral. Last time they were this low at the end of January, BTC was trading at $32k,” noted Rafael Schultze-Kraft, co-founder and CTO of Glassnode.

This has been despite the Bitcoin futures market having a new record volume on Tuesday with more than $180 billion traded across major exchanges.

The funding rates on Bitcoin perpetual rates are currently between 0.01% to 0.029%. As for Ether perpetual contracts, it is between 0.01% to 0.1461%, as per Viewbase.

“This is a spot driven market, so you have to be very adaptive with your understanding and interpretations of the funding rates,” noted trader and popular crypto personality Loomdart. “We can pump on high rates and dump on low rates, it's just a matter of the “potential’.”

Bitcoin: Futures Perpetual Funding Rate - All Exchanges

Source: Glassnode

Just as funding rates continue to fall, so are the premiums on Grayscale products. This week, the premium on Grayscale Bitcoin Trust (GBTC) went negative.

On Thursday, the premium on GBTC went into the negative territory -0.68%, which is the minimum it has ever gone. The highest this premium ever went to was 132.6% on May 31, 2017.

Today, the GBTC premium is back in the green at 3%. Currently, Grayscale owns 655.69k BTC, 3.518% of Bitcoin’s circulating supply.

Ycharts

Ycharts

Akin to the world’s largest digital asset manager’s Bitcoin product, the premium on ETHE is also declining. Though it hasn’t fallen into the negative territory, ETHE premium has also hit its lowest ever level at 0.10% on Feb. 24. The highest it ever got was 3,550% on Dec. 14, 2018, as per Ycharts.

Grayscale currently owns 3.17 million ETH, 2.761% of Ether’s circulating supply.

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