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.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
Bitcoin is often called the first cryptocurrency, although prior systems existed. Bitcoin is more correctly described as the first decentralized digital currency.
It is the largest of its kind in terms of total market value.
The Bitcoin Investment Trust (GBTC) is an investment vehicle for those interested in investing in Bitcoin without the hassle of actually buying and storing the bitcoins themselves. GBTC is traded on the secondary market, and its value is based on the underlying value of Bitcoin.
However, GBTC does not trade at the same price as Bitcoin. There are several reasons for this:.
NOTE: WARNING: GBTC is not the same as Bitcoin. GBTC is the ticker symbol for the Grayscale Bitcoin Trust, which is a private, open-ended trust that holds Bitcoin. It is not an exchange-traded fund (ETF) and is not directly equivalent to trading or owning actual BTC. The value of shares of the Trust and the price of Bitcoin are subject to supply and demand forces, which may cause them to trade at prices that differ significantly from the NAV per share.
The GBTC premium: GBTC typically trades at a premium to the underlying value of Bitcoin. This premium can range from 5-20%, although it has been as high as 40% in the past.
The premium reflects the fact that GBTC is one of the few investment vehicles available for those looking to invest in Bitcoin, and also reflects the trust’s management fees (2% per year) and other expenses.
The GBTC discount: Sometimes GBTC trades at a discount to its underlying value. This happens when there is high demand for Bitcoin but low demand for GBTC shares (perhaps because investors think the premium is too high).
The discount has ranged from 5-20% in the past, but has been as high as 40%.
Volatility: Both Bitcoin and GBTC are highly volatile investments. The price of Bitcoin can move up or down by 10% or more in a single day, and sometimes even more than that.
This volatility makes it difficult to value either asset accurately. As a result, there can be large discrepancies between the two prices at any given time.
Liquidity: GBTC is much more liquid than Bitcoin itself. It trades on major exchanges like Coinbase and Binance, and can be bought and sold just like any other stock or cryptocurrency.
This liquidity makes it easier to buy and sell GBTC, but also means that its price is more susceptible to manipulation by large traders (known as “whales”).
In conclusion, GBTC is not exactly the same as Bitcoin, but it is a close approximation. It trades at a premium or discount to the underlying value of Bitcoin depending on market conditions, but its price is also more volatile and susceptible to manipulation than Bitcoin itself.
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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 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.
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.
Bitcoin and GBTC are both digital assets that can be used to purchase goods and services. Bitcoin is a decentralized cryptocurrency that is not subject to government regulation, while GBTC is a trust that invests exclusively in Bitcoin and is regulated by the US Securities and Exchange Commission. Both assets have their pros and cons, but for investors, GBTC may be the better choice.
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.
Bitcoin is a new kind of asset and, as such, it is not surprising that its price would be volatile. However, the degree to which it has been volatile, and the reasons for that volatility, are not well understood. In particular, there is a common misconception that the price of Bitcoin is primarily driven by speculation.
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. The network is peer-to-peer and transactions take place between users directly, without an intermediary.