After a rough start to the week, the cryptocurrency market has started to gain back some of its losses. The pullback nonetheless resulted in the Grayscale Bitcoin Trust and Ethereum premium sinking to all-time lows.
Additionally, the funding rates that keep contract prices in line with spot markets have normalized.
“Bitcoin funding rates close to neutral. Last time they were this low at the end of January, BTC was trading at $32,000.” Said Rafael Schultze-Kraft, co-founder and CTO of Glassnode.
The funding rates on Bitcoin perpetual rates are currently between 0.01% to 0.029%. Ether perpetual contracts are between 0.01% to 0.1461%.
“This is a spot driven market, so you have to be very adaptive with your understanding and interpretations of the funding rates.” Said popular crypto personality Loomdart. “We can pump on high rates and dump on low rates, it’s just a matter of the “potential’.”
As funding rates continue to fall, so are the premiums on Grayscale products. On Thursday, the premium on Grayscale Bitcoin Trust went into the negative territory -0.68%.
That figure is the lowest it has ever gone. The highest this premium ever went to was 132.6% on May 31, 2017.
The Grayscale Bitcoin Trust premium has since climbed back up into the green at 3%. Grayscale owns 655.69k BTC, which is 3.518% of Bitcoin’s circulating supply.
The price of Bitcoin also increased 5% on Thursday and is currently hovering around $52,000. Ethereum is trading above $1,600 again as well.
Grayscale Most Influential Firm In Digital Asset Industry
Grayscale is arguably the most influential firm in the digital assets industry. It currently has over $31 billion in BTC under management in its Grayscale Bitcoin Trust.
When the GBTC Trust started trading at a discount, analysts were instantly concerned. Noted Bitcoin critic Peter Schiff claimed the Bitcoin price would plunge because of this.
Dan Morehead, the CEO of Pantera Capital, also believes this could have an effect on the market. “If you buy it at a 20 percent premium then sell it at 5 percent, it’s not such a great trade,” he said.
Premium on Ethereum also declining
Meanwhile, the premium on Ethereum has also been on the decline. While it hasn’t fallen into the negative territory, it sunk to its lowest ever level at 0.10% on Feb. 24. The highest it ever got was 3,550% on Dec. 14, 2018