Quote from: BTCWALK on July 05, 2020, 10:12:08 AM

In other news, Grayscale, one of the most popular and popular digital currency investment funds, added 19,879 Bitcoin units to its Bitcoin Investment Fund last week alone.
This is much larger than the 7,081 bitcoins extracted during this period, indicating that demand is now above supply.

There's been a lot of buzz about this, but I don't think it means much. What is happening in my opinion is arbitrage:

Quote from: exstasie on June 05, 2020, 08:16:12 PM

I took a closer look at the GBTC chart vs. BTCUSD and noticed the GBTC premium has been falling quite a bit recently. It's dropped in half since February alongside these big inflows.

I think there is increasing pressure to arbitrage the GBTC price. Even given the 1-year lockup period, a 30% premium (that's what it was at the Febuary peak) is just ridiculous not to arbitrage in a market with increasing regulated options at lower carry costs.

As one example, institutions could short GBTC while it's trading at a huge premium while buying shares at a discount (the NAV price) during private placements.

If this explains the increased volume, then we can probably expect the volume to die down (and maybe Grayscale's overall holdings to decrease as well) once the premium is no longer worth arbitraging.

What was a 30% premium just a few months ago is now a 7.9% premium per GBTC's close on Friday!

Some whale is buying at a discount in private placement and then hedging short on the GBTC market. It's an arbitrage trade, not indicative of real buying demand.