Jan 13, · 1. What is the Bitcoin Investment Trust (GBTC)? This trust acts as a bitcoin fund of sorts, offering up the opportunity to bet on bitcoin by buying its shares. The trust owns bitcoins on its Author: Jordan Wathen. Tips for Trading GBTC (the Bitcoin Investment Trust) in and Beyond. The Bitcoin Investment Trust is the only choice for investors to trade Bitcoin on the stock market, and for this investors pay a premium. Below we explain the Bitcoin Investment Trust (GBTC), the pros and cons of GBTC, and why GBTC is a better investment than Bitcoin in some ways (but not in others). rows · Eligible shares of Grayscale Bitcoin Trust are quoted on OTCQX® under the symbol: GBTC, making it possible to buy or sell shares continuously through the trading day at prices established by the market. Supported by a network of trusted service providers Davis Polk & Wardwell LLP serves as legal counsel to the Sponsor of Grayscale Bitcoin Trust.
Bitcoin investment trust (over the counter markets gbtc)GBTC Stock Price | Grayscale Bitcoin Trust Stock Quote (U.S.: OTC) | MarketWatch
Market Price. When the market price is higher than NAV i. The GBTC premium works as an indicator of crypto sentiment at least, if not price direction. Anyone who claims GBTC should trade at the value of Bitcoin cough; Andrew Left may not understand or admit how big a benefit it is to be able to trade a trust rather than cryptocurrency.
It also shows us the demand for Bitcoin is high, even if not everyone takes that demand to the traditional Bitcoin markets. If you want to trade the future price of Bitcoin, you can trade Bitcoin futures. Trading GBTC means paying a premium for quick no limit trading. Meanwhile, trading actual Bitcoin means dealing with all sorts of limits and transactions fees. Do you want to be able to trade quickly and easily from your traditional brokerage account at the expense of limited trading hours and a premium?
Or do you want way better profit margins with slower trades, transactions fees, a bigger learning curve, and some additional risks, but be able to trade instantly and at cost? That means it would take more than 1, shares of GBTC to own one bitcoin. Steeper declines could mean that shares could lose most or all of their value. Alternative Investments. Your Money. Personal Finance.
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Related Articles. Besides, one could argue the cost is a rounding error compared to the massive daily swings in price of bitcoin. Anyone who earned a 1, To be sure, owning Bitcoin Investment Trust is a lot easier than buying the digital currency on an online cryptocurrency exchange. Convenience always comes at a higher price. Yes and no. In theory, Bitcoin Investment Trust should generally rise in value when bitcoin rises, and fall when the price of bitcoin declines. In practice, on roughly one out of three trading days, bitcoin and Bitcoin Investment Trust actually moved in opposite directions.
The trust's popularity is to blame for its rather unpredictable performance. It's safe to say that Bitcoin Investment Trust is likely to outperform bitcoin when investors pile in, and underperform bitcoin when investors flee from its shares. It tends to overshoot both up and down, rising more than bitcoin when the digital currency soars in value, and falling faster than bitcoin when it declines in value.
Since going public, Bitcoin Investment Trust has closed at prices as high as 2. At its low, the trust closed at a price 0. If you can buy shares at a small premium, it may be worth paying up for the convenience of safely owning bitcoin through a vehicle you can buy or sell through an ordinary brokerage account. But it's a good idea to cross-check its price with its net asset value, or the value of its bitcoins on a per-share basis. It would be an unfortunate thing to pay such a high price that you end up losing money on Bitcoin Investment Trust over a period in which bitcoin rises in value.