The Grayscale Bitcoin Trust is trading down 40%, is this just a warning or a sign of a deep crisis?

The collapse of FTX, a crypto-currency exchange, has left a significant mark on the global digital asset market. Several crypto-currency exchanges and lending platforms have felt the impact of the debacle. The Grayscale Bitcoin trust is trading at a negative premium.

According to the data, the negative premium of the Grayscale Bitcoin Trust Fund (GBTC) has expanded to a whopping 42.7%. While the negative premium of the Ethereum Fund dropped to 40.12%. Both trust funds hit a record high.

Reports suggest that the value of GBTC, which holds 3.5 percent of the world’s Bitcoin, has fallen as investors are reluctant to invest in the market following the recent FTX crash. However, Grayscale said it was not affected by the collapse of Genesis and its subsidiary DCG.

The drop in the premium indicates that fiat investors have suffered an 83 percent loss since the price of bitcoin hit its high (ATH) in November. The price of bitcoin has fallen 65% on a year-to-date basis.

Bitcoin is trading at an average price of $16,748, today. BTC’s total market capitalization now stands at $321.7 billion.

Is this a warning to crypto-currency investors?

According to experts, investor confidence in crypto-currencies has massively decreased with the FTX implosion. The global digital asset market cap has fallen below the crucial $1 trillion mark due to the recent turn of events.

Gray investors appeared to panic on Wednesday when crypto lending platform Genesis suspended services. Genesis was reportedly responsible for more than $50 billion in loans last year. However, its lending arm suffered a blow following the collapse of Three Arrows Capital.

Genesis and Grayscale are subsidiaries of Digital Currency Group. Genesis acted as an authorized participant of GBTC. It is responsible for issuing new shares for Grayscale securities until last month.