The Grayscale Chainlink Trust (GLINK) has seen its premium over LINK tokens surge to a record 200%, indicating intense institutional demand for regulated and SEC-reported exposure to Chainlink’s native asset.
Keypoints
- Shares of the Grayscale Chainlink Trust (GLINK) are trading at a 200% premium compared to the price of LINK tokens. This indicates strong institutional demand for exposure to LINK.
- The large premium is driven by a doubling of assets under management in GLINK to $4 million, with $2 million of inflows last week.
- Grayscale products like the Chainlink Trust allow accredited US investors to gain exposure to cryptocurrencies through SEC-registered securities.
- Many believe Grayscale could convert its trusts into ETFs if its Bitcoin Trust is approved as an ETF. This may pave the way for other Grayscale products like the Chainlink Trust to also become ETFs.
- The Chainlink Trust premium has hit its highest ever level of 200%. Previously it traded at premiums around 20-150%.
- LINK prices have surged over 76% in the past month due to protocol upgrades and institutional adoption of Chainlink services.
- The Chainlink Trust provides regulated and SEC-reported exposure to LINK for institutional investors in the US. The high premium indicates strong institutional demand for LINK exposure.
GLINK shares are now trading at triple the price of LINK tokens, with the trust’s assets under management doubling to $4 million amid $2 million of inflows over the past week.
The gigantic spread comes as LINK prices themselves have rallied over 76% in the last month on the back of major protocol upgrades and increasing institutional adoption of Chainlink’s market-leading oracle services.
Accredited US investors have flocked to GLINK as one of the only ways to gain exposure to LINK through an SEC-registered product that provides regular financial disclosures. The trust charges a 2.5% annual fee and allows participation in LINK’s upside without direct crypto ownership.
Grayscale Chainlink Trust $GLNK trading at a 200%+ premium over spot ????
$39 per share, with 0.93482160 $LINK per share pic.twitter.com/0dxljSDzQ8
— ChainLinkGod.eth (@ChainLinkGod) November 8, 2023
Many analysts believe the soaring premium foreshadows a potential conversion of GLINK into a LINK exchange-traded fund (ETF) if Grayscale succeeds in turning its Bitcoin Trust into an ETF product.
The SEC’s recent tacit approval of Grayscale’s Bitcoin Trust conversion by declining to appeal a court verdict in Grayscale’s favor has ignited expectations that other Grayscale trusts could follow. An ETF structure would allow arbitrage to close the sizable gap between GLINK and LINK prices.
For now, the gigantic premium underscores surging institutional appetite for LINK and regulated vehicles like GLINK that provide exposure without the hassles of direct cryptocurrency investments. With Chainlink establishing itself as the industry-standard oracle solution, investors clearly want in on its upside potential.
