Realized Bitcoin losses spike as Grayscale GBTC trades at less than $10k BTC equivalent

Bitcoin investors have locked in the fourth-largest spike in realized losses in 2022 during the current market downturn. Over $1 billion dollars has been locked in since Nov. 9 as investors panic sells amid high market uncertainty.

Realized losses spike

A myriad of factors has played into the situation with the core driver being the now-announced bankruptcy of one of the largest crypto exchanges in the world, FTX.com. Bitcoin fell to as low as $15,592 on Nov. 9 after a bullish run up to $21,414 just four days before on Nov. 5.

CryptoSlate analyzed on-chain data from Glassnode to identify the impact on realized profit and losses throughout the current market turmoil. The chart below highlights the volume of realized returns since the start of the 2021 bull run.

The Higher Values indicate a greater daily volume of realized profit or loss with red sections representing losses and green signifying profits. The chart focuses only on realized profit and loss meaning coins that were bought at one price and sold at another.

Grayscale Bitcoin Trust Discount Record

The Grayscale Bitcoin Trust was also hit hard by the downturn as GBTC currently trades at a 41% discount to its NAV (Net Asset Value). The investment vehicle started the year at just a 17% discount but has been on a downtrend throughout the entirety of 2022. Purchasing shares in GBTC as of press time is equivalent to buying Bitcoin at $9,771.

Historically, GBTC has traded at a premium as investors who were unable to buy Bitcoin directly flocked to the investment vehicle to gain exposure to the world’s largest cryptocurrency by market cap. The premium went over 100% in December 2017 and finally moved negative for the first time in February 2021. The current price is at an all-time low for the Trust as interest in the product dwindles amid price capitulation.