Since mid-March, when the COVID-19 pandemic began to upend global markets, investors have been fleeing to the relative safety of digital assets like Bitcoin. The leading cryptocurrency has seen its price surge more than 60% since late March, as investors seek refuge from the economic uncertainty caused by the pandemic.
But there’s one corner of the Bitcoin market that’s been lagging behind the rest: Grayscale’s Bitcoin Trust (GBTC). This publicly traded investment vehicle allows investors to gain exposure to Bitcoin without having to actually purchase and hold the digital currency themselves.
However, GBTC has been trading at a significant discount to its net asset value (NAV) for months now. As of June 8, 2020, GBTC was trading at a 9.8% discount to its NAV of $9.02 per share.
That means that if you were to buy one share of GBTC today, you’d be paying $8.12 for each dollar worth of Bitcoin that the trust holds.
NOTE: WARNING: Investing in Grayscale Bitcoin Trust Trading at a Discount is risky and could lead to losses. This type of investment is speculative and can be volatile. Prices for Bitcoin can fluctuate significantly, and it is possible that investors may not be able to regain their original investments. Additionally, the Trust is subject to the risks associated with the cryptocurrency market generally, including potential regulatory developments, liquidity risks, and security risks.
So why is GBTC trading at such a discount? There are a few potential explanations.
First, it’s important to understand how GBTC is structured. The trust holds a certain amount of Bitcoin, and each share represents a fraction of those holdings.
When investors want to buy GBTC, they’re actually buying shares of this trust.
The trust then uses this money to buy more Bitcoin. However, because GBTC is structured as an investment vehicle, it incurs expenses like management fees and other costs.
These expenses eat into the trust’s profits, and they also reduce the amount of Bitcoin that each share represents.
10 Related Question Answers Found
When it comes to trading Bitcoin, there are a lot of options available. One popular option is Grayscale Bitcoin Trust (GBTC). GBTC is a digital currency investment trust that allows investors to gain exposure to Bitcoin without having to actually purchase or hold the cryptocurrency.
Grayscale Bitcoin Trust is a digital asset that tracks the price of Bitcoin. It is traded on an exchange and can be bought and sold like any other security. The trust is open-ended, meaning that new shares can be created and sold to investors.
Bitcoin Cash Trust (BCHG) is an investment trust that enables investors to gain exposure to the price movement of Bitcoin Cash (BCH) without having to buy, store or manage the underlying cryptocurrency. The trust is currently the only investment product available that offers exposure to BCH. BCHG is managed by Grayscale Investments, LLC, a digital currency asset manager.
Investors rejoice as Bitcoin prices surge past $17,000
It’s been a wild ride for Bitcoin investors this year. The cryptocurrency has surged to new all-time highs in recent months, as more and more people have taken an interest in the digital asset. And the latest price surge has taken Bitcoin past the $17,000 mark, much to the delight of investors.
Grayscale Bitcoin Trust is an investment trust that holds Bitcoin and issues shares of the trust to investors. The trust is managed by Grayscale Investments, LLC, a subsidiary of Digital Currency Group, Inc. The trust’s objective is to track the performance of the price of Bitcoin, less the expenses of the trust’s operations.
When it comes to Bitcoin, we’re in the midst of a price dip. After reaching an all-time high of nearly $20,000 in December, Bitcoin prices have fallen to around $10,000. That’s a 50% drop in value, and it has many people wondering why Bitcoin prices are falling.
The Grayscale Bitcoin Trust is an investment vehicle for individuals seeking exposure to bitcoin without having to buy, store, or manage the underlying digital currency. The Trust is sponsored by Grayscale Investments, LLC (“Grayscale”), a digital currency asset manager. The current premium for the trust is 1.03%, meaning that for each share of the trust you own, you are paying $1.
03 more than the underlying value of the bitcoins held by the trust. .
Bitcoin is a decentralized cryptocurrency, which means that it is not subject to government or financial institution control. Bitcoin is a peer-to-peer system, which means that all transactions are direct between users, without an intermediary. This makes Bitcoin a very attractive option for those who wish to avoid the fees and restrictions associated with traditional financial institutions.
When it comes to investing in Bitcoin, there are a few different options available. One option is to invest in the Grayscale Bitcoin Trust. The Grayscale Bitcoin Trust is a trust that invests exclusively in Bitcoin and it is one of the most popular ways to invest in Bitcoin.
Grayscale is one of the largest institutional investors in Bitcoin and they continue to buy Bitcoin. In the first quarter of 2020, they bought more than $250 million worth of Bitcoin. This was more than they had bought in the entire previous year.
