Grayscale Bitcoin Trust is a digital currency investment product that enables investors to gain exposure to the price movement of Bitcoin (BTC) without the challenges of buying, storing, and safekeeping BTC.
The investment objective of GBTC is for the shares to reflect the performance of the Blended Bitcoin Price Index less the Trust’s expenses and liabilities. The Blended Bitcoin Price Index is a rules-based methodology that averages the U.
S. Dollar price of BTC across major exchanges weighted by trading volume.
GBTC is one of the first investment products to give investors exposure to BTC and was created in 2013 by Digital Currency Group, a venture capital firm focused on investing in digital currency and blockchain technology companies.
Since its inception, GBTC has become one of the most popular ways for investors to gain exposure to BTC. As of March 31, 2019, GBTC had $2.
1 billion in assets under management and over 800,000 shares outstanding.
Investors can buy or sell GBTC shares through a broker-dealer with a valid broker-dealer account. GBTC trades on the OTCQX market under the ticker symbol “GBTC” and is also eligible for certain IRA, Roth IRA, and other retirement accounts.
The main advantage of GBTC is that it provides investors with an easy way to invest in Bitcoin without having to deal with the challenges associated with buying, storing, and safekeeping BTC.
Another advantage of GBTC is that it trades on a public market, which provides greater liquidity than if investors were to buy BTC directly.
However, there are also some disadvantages to consider before investing in GBTC. First, because GBTC is a trust, it is subject to the whims of the Trustee, which can lead to delays in processing redemptions or other issues.
Second, GBTC charges a 2% annual management fee, which is higher than most other digital currency investment products. Finally, because GBTC holds actual BTC, it is subject to losses if BTC prices fall sharply.
Overall, GBTC can be a good way for investors to gain exposure to Bitcoin without having to deal with the challenges associated with buying and storing BTC directly. However, investors should be aware of the potential risks involved before making any investments.