When it comes to Bitcoin, there are two main ways to get exposure to the asset: buying Bitcoin directly, or buying GBTC, an exchange-traded product that tracks the price of Bitcoin. So, which is the better option?
Bitcoin vs GBTC
The main difference between buying Bitcoin and GBTC is that with the latter, you are also paying a premium for the convenience of having an easy way to trade Bitcoin on a traditional stock exchange. For example, at the time of writing, one GBTC shares was equivalent to 0.0016 BTC – or about $11.
50 – while the actual price of Bitcoin was around $9,700. So, you are paying a 20% premium for each GBTC share.
Another key difference is that GBTC is a trust managed by Grayscale Investments, meaning that it is subject to additional regulatory scrutiny compared to buying Bitcoin directly. This could be seen as a positive or negative depending on your perspective.
NOTE: WARNING: Trading in Bitcoin or GBTC can be incredibly risky and is only recommended to those with a high risk tolerance. Investing in either Bitcoin or GBTC should be done with caution, as prices can be highly volatile and subject to significant losses. Before investing, it is important to research both Bitcoin and GBTC thoroughly and understand the associated risks.
On the plus side, it means that Grayscale is held to a higher standard when it comes to safeguarding investors’ money and ensuring that the trust’s holdings match its reported NAV (net asset value). On the other hand, it also means that GBTC is less flexible than buying Bitcoin directly, as Grayscale will need to go through additional hoops in order to make changes to the trust.
Lastly, it’s worth noting that GBTC is not available for purchase by everyone – only accredited investors or those who meet certain other criteria can buy the trust. This again could be seen as a positive or negative depending on your perspective; accredited investors tend to be high-net-worth individuals who are better able to absorb losses if things go wrong, but it also means that smaller investors are excluded from investing in GBTC.
Conclusion
So, which is the better option – buying Bitcoin or GBTC? There is no right or wrong answer here – it ultimately depends on your individual circumstances and preferences. If you are looking for an easy way to trade Bitcoin on a traditional stock exchange and don’t mind paying a premium for the convenience, then GBTC could be a good option for you.
However, if you want full control over your investment and don’t mind dealing with a bit more complexity, then buying Bitcoin directly might be a better choice.
8 Related Question Answers Found
Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
When it comes to investing in Bitcoin, there are a number of ways to do so. One popular method is through the use of a company called GBTC. GBTC is a company that allows investors to buy and sell Bitcoin through the use of a traditional stock exchange.
When it comes to Bitcoin, there are a lot of things that people don’t understand. One of the most common questions is “Why is GBTC not the same price as Bitcoin?”
The answer to this question is actually quite simple. GBTC is not the same price as Bitcoin because it is a trust that holds Bitcoin.
Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
When it comes to Bitcoin, there are a lot of different ways to skin the cat. You can buy Bitcoin, you can mine Bitcoin, or you can trade Bitcoin. But what if you want to invest in Bitcoin without actually buying or selling any Bitcoin?
As of late 2017, GBTC was the largest bitcoin ETF by assets under management and the only one available to trade on a major U.S. stock exchange.4 The fund’s objective is for the NAV to track the market price of bitcoin, less fees and expenses. The fund holds actual bitcoins—not futures contracts or other derivatives—and is fully invested in bitcoin.
Bitcoin is the world’s first and most well-known cryptocurrency, with millions of people around the world using it to buy and sell goods and services. GBTC is a fund that allows investors to gain exposure to Bitcoin without having to buy or store the underlying asset. GBTC is traded on the stock market, and its price is based on the price of Bitcoin.
GBTC is a trust that owns Bitcoin and sells shares of that trust to investors. GBTC is thus a vehicle for holding Bitcoin that is tradeable on traditional markets. You can redeem GBTC for Bitcoin, but there may be a premium attached to the redemption depending on market conditions. .
