Bitcoin (BTC) investment vehicle Grayscale Bitcoin Trust (GBTC) is trading close to 50% below the BTC price on spot markets.

Data from on-chain analytics platform Coinglass confirms that on Dec. 8, GBTC shares hit a new record low of -47.2% against BTC/USD.

GBTC troubles pile up post-FTX

In the latest bout of nerves to hit the Bitcoin industry since the fall of FTX, GBTC is nearing half-price versus the price of Bitcoin.

The largest institutional Bitcoin investment vehicle, with assets worth around $10 billion, GBTC has faced numerous challenges in recent years.

The price of its shares previously traded higher than BTC/USD, resulting in what was called the “GBTC premium.” Since 2021, however, that premium has turned negative, but the resulting “discount” has done little to lure additional institutional interest.

As Cointelegraph reported, beyond a few key exceptions such as ARK Invest, GBTC is languishing. Operator Grayscale, part of Digital Currency Group (DCG), has meanwhile been attempting to convert it to an exchange-traded fund (ETF), suing U.S. regulators standing in its way.

Amid the legal battle, FTX has sparked liquidity problems elsewhere in the DCG empire, and this has led to doubts over Grayscale and GBTC. Grayscale declining to show proof of its BTC reserves last month added to the tensions, although custodian Coinbase confirmed the assets were secure.

“Grayscale is in some real trouble if they have to reveal where all the Bitcoins are that back the GBTC,” popular commented Bitfinex’ed wrote in part of a Twitter discussion on the topic this week.

This week things became even worse, as Grayscale faced a lawsuit from investor Fir Tree over what it calls “shareholder-unfriendly actions.”

GBTC premium vs. asset holdings vs. BTC/USD chart. Source: Coinglass

Meanwhile, overall interest in crypto ETFs has plummeted this year, separate data suggests.

Woo: Problems "partly bullish" for Bitcoin

With that, the GBTC share price ratio to its underlying Bitcoin assets, having barely recovered from previous record lows, sank even further. 

Related: Why is Bitcoin price down today?

“$GBTC discount to bitcoin NAV [net asset value] is on the express elevator to hell. => sentiment = bearish,” summarized Timothy Peterson, investment manager at Cane Island Alternative Advisors.

Others lamented the slow pace of change in the U.S. as fueling the fire.

“Quite a lot of the pain this year would have been avoided if GBTC had been made into an ETF SEC keeping everyone safe!” investor and entrepreneur Alistair Milne reacted, echoing popular sentiment from recent weeks.

Willy Woo, creator of statistics resource Woobull, meanwhile argued that the impact of fading GBTC exposure was not necessarily a straight negative for BTC price strength.

“The GBTC / DCG / Genesis fears is a bearish cloud hanging over the market. But counterintuitively part of the impact has been bullish for BTC price,” he tweeted on Dec. 5.

“37.5% of people who sold GBTC bought spot BTC to take custody. Selling GBTC does not impact BTC price, buying spot does.”

An additional Twitter survey quizzed the platform's users who notionally own GBTC over their motives to sell:

Willy Woo Twitter survey (screenshot). Source: Willy Woo/Twitter

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