Shares of the Barry Silbert Grayscale Bitcoin Investment Trust (GBTC) fell by 80% since Bitcoin reached its historic high at the end of last year, Bloomberg reports.
In addition to a lowering trend on the cryptocurrency market, investors, however, tend to blame its high fees for failures of the fund. According to the available information, GBTC charges 2% of the invested amount to cover administrative, managerial, advertising and other expenses, while the average fee for mutual funds in 2017 was 0.59%.
"Expense ratios are insane for these funds and the current Bitcoin price is creating more problems," said Naeem Aslam, the London-based chief market analyst at TF Global Markets U.K. Ltd. as a comment to Bloomberg.
Despite the continuous decline in the cryptocurrency market, a few months ago, the GBTC claimed that investors were still interested in its offer. In July, the company reported that in the first half of the year, investments in its cryptocurrency products amounted to $250 million - the largest amount since its launch in 2013.
“However, what is more interesting, and somewhat counterintuitive, is that the pace of investment into Grayscale products has accelerated to a level that we have not seen before,” the company wrote back then.
“Bitcoin continues to be the most popular position for Grayscale investors, with 63% of inflows into Bitcoin Investment Trust and 37% into Grayscale products tied to other digital assets.”
At the same time, the company reported that its products are especially popular among institutional investors. According to it, the average size of an institutional shareholder’s investment for this period was $848,000. Accredited individual investors accounted for about 20% of the attracted capital, and each of them contributed an average of $300,000.
Grayscale Investments is the operator of the popular Bitcoin Investment Trust instrument and serves a total of seven products, each of which is pegged to a different currency, as well as one diversified product.
Today, in six hours, the capitalization of the cryptocurrency market grew by $5 billion after an unexpected jump in the Bitcoin rate.
Over the past weeks, since August 9, Bitcoin has remained relatively stable in the range of $6,400- $6,800, only occasionally going beyond the upper or lower limit of the interval. This is the highest level of stability for the BTC since June 2017.
Over the course of the week, forecasts from experts and analysts remained generally pessimistic for Bitcoin, primarily due to declining volumes and the formation of ever lower highs. At the time of writing this, daily Bitcoin trade volumes are below $4 billion. This figure generally indicates a market fatigue from the side of the bulls who tried to break above $7,000 all September, as well as bears, who tried in vain to push support at $6,000.
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