Institutional investors do not seem to slow down pouring funds into digital currencies. Grayscale’s latest newborns – Bitcoin Cash Trust and Litecoin Trust – are already on-demand and profitable.
Grayscale Investments, the world’s largest digital currency asset manager, has launched public trading for shares on its Bitcoin Cash Trust and Litecoin Trust a few days before, on August 17. Just three days after the latest investment products are trading with solid premiums each.
According to digital asset analytics Arcane Research, Grayscale Bitcoin Cash Trust has been trading at a 351% premium on August 19. Meanwhile, the Grayscale Litecoin Trust showed even more impressive results of trading at a 753% premium the same day.
The Grayscale Litecoin Trust became publicly traded this Tuesday and has traded with a wild premium since the launch.— Arcane Research (@ArcaneResearch) August 20, 2020
Currently, the premium of LTCN is at a whooping 753%.
High retail demand for LTC exposure generates lucrative returns for the early investors of the trust. pic.twitter.com/Kcq8ZI6qz8
The new cryptocurrency Trusts launched for public trading means that interested investors are now able to invest in Bitcoin Cash and Litecoin without actually having to buy any of these assets and store them by themselves.
As seen in the Arcane Research’s charts, both BCH and LTC Trusts have changed direction through the second day after launch. The premium percentage of Bitcoin Cash Trust started falling soon after launch. Although the course stabilized a day later, it seems to keep slightly decreasing, which indicates that the BCH demand is not equal to Litecoin’s.
In the meantime, the Litecoin Trust regained its posture after the August 18 drop and started to climb back even surpassing the initial market price of $45 and generating solid returns for early investors.
Despite the fact that a single Grayscale’s Trust is based on a single asset and cannot outperform it, there are explanations why the demand and premiums are soaring. According to the researchers, buying these Trusts in the secondary market is the only option for retail investors to invest in digital assets via their retirement (401k) savings. Since accredited investors are the ones with the ability to sell these assets, the premiums come higher compared to the underlying value of the shares. Arcade Research analytics believe the unusually high premiums show the immense public demand for digital assets, indicating that the market is more than ready for exchange-traded funds (ETF).
Grayscale Bitcoin Trust leading
Both Bitcoin Cash Trust and Litecoin Trust are the fifth and sixth Grayscale’s products, added to the increasingly growing Grayscale’s cryptocurrency Trust family that already includes Bitcoin Trust (GBTC), the Ethereum Trust (ETHE), the Ethereum Classic Trust (ETC) and the Grayscale Digital Large Cap Fund (GDLC).
The Bitcoin Trust is by far the most popular and the best performing one with over $5 billion worth of assets under management (AuM). Meanwhile, the Ethereum Trust has also increased significantly counting over $876 million worth of assets on August 17.