Bloomberg partners with Grayscale to launch "Financial Future Index"; GBTC trades at a 28% discount, breaking ATH

Bloomberg announced yesterday, the 19th, a collaboration with the cryptocurrency asset management firm Grayscale to launch the "Future of Finance Index" to track the rapidly growing digital economy. In addition, the Grayscale Bitcoin Trust (GBTC) has recently underperformed, with its discount hitting a record high.

Bloomberg Grayscale Future of Finance Index

Through rigorous data-driven and transparent construction processes, Bloomberg and Grayscale have collaborated to create the "Future of Finance Index." The companies behind the index are seen as having the potential to make significant contributions to the future of digital assets over the next 2 years and generate remarkable revenue returns.

These companies are mainly categorized into three groups: financial infrastructure, digital asset infrastructure, and technical solutions, including payments, exchanges, asset management, hardware, blockchain technology, or miners. The index currently tracks 22 companies and is readjusted quarterly. Bloomberg clients can access the index using the stock code BGFOF and retrieve historical data up to December 2020.

"The design of the Bloomberg Grayscale Future of Finance Index is quite unique, as it is the first to track companies and technologies that are shaping the future of financial services through analyst oversight." said Michael Sonnenshein, CEO of Grayscale.

GBTC Trading at a 28% Discount

Despite Grayscale constantly introducing new products, their core product, the Bitcoin Trust GBTC, has been experiencing a persistent discount. According to data from YCHART, the discount has reached 28.29%, hitting a new all-time high.

GBTC has long been a favored investment tool for many institutional investors, allowing exposure to Bitcoin without the need to purchase the actual underlying assets. However, holders are subject to a 2% annual management fee and a 6-month lock-up period.

The significant discount not only indicates that holders may be in a loss position but also reflects a lack of market demand for GBTC, possibly due to waning institutional interest or skepticism about the future performance of Bitcoin.

Nevertheless, Grayscale has been attempting to convert GBTC into a physically-backed Bitcoin ETF in recent months, which is currently under review by the U.S. Securities and Exchange Commission (SEC). Approval of this conversion could help boost market demand and alleviate the current predicament.