The shares of Grayscale Bitcoin Cash Trust and Grayscale Litecoin Trust are currently traded at a premium of more than 1.000% over the value of the underlying assets.
For example, in the case of Grayscale Bitcoin Cash Trust, the price at which the shares are currently traded is approximately $34, while each share corresponds to only BCH 0.00933798, which is less than $3.
For the Grayscale Litecoin Trust, the share price is $425, while each share corresponds to LTC 0.09337977, or approximately $7.
In the first case, the premium is 1.200% higher, while in the second case it is as high as 5.900%.
These two financial products are funds invested exclusively and passively in the underlying assets, allowing investors the possibility of obtaining exposure to them in the form of shares, thus bypassing the purchase, preservation and direct custody of the assets.
The value of Bitcoin Cash and Litecoin Grayscale Trusts
The value of the Trust‘s shares varies together with the price of the underlying asset but does not replicate it exactly.
For example, at this moment the price of BCH is about $280, while the price of BCHG (the shares of the Grayscale Bitcoin Cash Trust) is just under $34.
Moreover, even the volatility seems to be different, so much that for example at this moment the BCHG shares are worth 153% more in comparison to August 18th, 2020, when they have been introduced on the market, while in the same period the value of BCH has increased only 3%.
As for LTCN shares of the Grayscale Litecoin Trust, also launched on August 18th, the increase in value to date is an incredible 1.640%, while the price of LTC over the same period has only increased by 25%.
The value of the Grayscale Bitcoin Trust (GBTC) shares also offers a premium over the BTC price of around 23%, while the premium of the Grayscale Ethereum Trust (ETHE) is almost 60% higher.
These products are mainly traded on OTC markets, and the difference in value (the premium) creates an opportunity for traders to take advantage of the spread between the premium and Net Asset Value (NAV).