Peter Schiff criticized Bitcoin exchange-traded funds (ETFS) on the grounds that he is certain they are experiencing a decline. He observed that every spot Bitcoin ETF has entered a bear market, which is defined as a decline of at least 20% from the fund’s all-time high.
Schiff directed attention towards the $FBTC fund, which experienced a significant decline of 32%. In his opinion, the Vaneck Bitcoin Trust, which is currently trading under the symbol $HODL, should change it to GTFO.
His remarks also encompassed the capabilities of the ProShares Bitcoin Strategy ETF ($BITO), which helps in tracking Bitcoin futures. With an initial offering price of $40.88 in October 2021, the ETF has had a steep decline, reaching a low of $19 in less than two years—a loss of more than 50%. Schiff cautions that even more substantial losses might be in store for investors in any of the 11 spot Bitcoin exchange-traded funds.
Additionally, the estate is exerting control over the bankruptcies of FTX and Alameda Research by selling a significant portion of their holdings in the Grayscale Bitcoin Trust (GBTC), as Bloomberg reported. This places additional strain on Bitcoin investment products.
According to sources close to the case, the FTX estate had 22.28 million GBTC shares prior to January 11, which were valued at $902 million. In the three days following the trust’s conversion to a spot ETF, more than two-thirds of the shares in question were sold. Consequently, the remaining shares are worth less than $281 million.
The transaction was executed during a favorable time when the discount on the net asset value of the GBTC shares reached 1.55 %. This facilitated the alignment of share prices with the intrinsic value of Bitcoin. At the moment, each GBTC share is trading for 0.27% less than its net asset value.
Since that time, specifically since January 11, the Grayscale Bitcoin Trust has recorded Bitcoin sales exceeding $700 million.