According to an investor at Cane Island Alternative Advisors, the price of Bitcoin could see a drop to k. This is due to a gap between the leading cryptocurrency and GBTC.
In the past, Peterson has said that the flagship currency has been following in the footsteps of the trend for the premium of the Grayscale Bitcoin Investment Trust (GBTC), an investment vehicle used by several accredited and institutional investors in Bitcoin.
Over the past 30 or so days, the premium of GBTC took a big hit but despite this, the price of Bitcoin stayed relatively stable. Peterson said that the gap between the premium and Bitcoin could be the catalyst for the next downside movement for the leading cryptocurrency.
If the price of Bitcoin drops to the $6k level though, before the turn of the year, Peterson believes it would be a big indicator for a 30 percent drop from its current price around the $8.3k range.
GBTC could be seen as an indicator for the short to the medium-term trend for the price of bitcoin. This is because it mirrors the demand towards the asset from a different market of investors focused around organisations and institutions.
Based on the analysis of Peterson, GBTC tends to have a premium of around 3-/4- percent however, this depends on the state of the bitcoin market. Over the ]ast few weeks, the GBTC premium dropped to nearly 20 percent which led Peterson to forecast a plummet to the $6k area.
He said:
“When bitcoin’s price was well above the GBTC premium, it fell substantially. Now, a gap has opened up again. GBTC’s premium has fallen from $4.00 per share to $2.00 per share. This implies that bitcoin’s price should fall from about $12,000 to $6,000. The relationship between GBTC premium and bitcoin price has not been stable and predictable over time. However, our fundamental models also value BTC at about $6,000. It appears that institutional and long-term US investors in GBTC are expecting this price level for bitcoin as well.”
It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!
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