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    The Grayscale Bitcoin Trust (GBTC) shares have widened their discount relative to the underlying cryptocurrency held in the fund, reaching a record of 26.5% on Wednesday.

    GBTC has been the preferred venue for institutional investors to gain exposure to crypto without having to purchase bitcoin directly, but the shares have traded at a steep discount over the past year as demand for the product shrank. (Grayscale Investments, which manages the trust, is a unit of Digital Currency Group, which also owns CoinDesk.)

    The premium flipped to a discount in February 2021 and has steadily widened ever since due to several factors, including the launch of spot-based exchange-traded funds (ETFs) in Canada. The new options provided an alternative to investors looking to allocate money toward bitcoin via a stock-market vehicle.

    The persistent discount could also be due to investor skepticism regarding Grayscale’s plan to convert the fund into spot-based exchange traded fund (ETF). Some analysts do not expect a conversion anytime soon, and in the meantime investors are getting charged fees.

    The U.S. Securities and Exchange Commission has so far refused to approve a spot bitcoin ETF.

    “There’s still no way for bitcoin to ever leave GBTC, which means it should continue to trade with a substantial discount to reflect that illiquidity,” David Nadig, director of research and chief investment officer at ETFTrends.com, wrote in an email to CoinDesk.

    The recent crypto sell-off also may have contributed to a wider GBTC discount. Bitcoin is down roughly 37% from its all-time high around $69,000 in November, although the cryptocurrency’s price appears to be stabilizing around $42,000 at the time of writing.

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