Produced by Ryan Wilday, along with Avi Gilburt
Over the last two weeks, we shared our point of view that Bitcoin was headed to $150K in this cyclical bull market. For many of our subscribers, they’d rather not engage retail Bitcoin exchanges for good reason. They are just not as stable as stock trading platforms, often going down when crypto volatility increases only slightly. Moreover, security on crypto exchanges requires much personal diligence.
GBTC to the Rescue
For those subscribers nervous about crypto exchanges, NYSEARCA:GBTC, the Bitcoin Trust Fund by Grayscale Investments, is a great alternative and one we cover with nearly the same detail as Bitcoin. It trades over the counter just like a stock and is available at most common brokerage platforms.
Grayscale Investments has become an important player in the crypto market. Due to being a trusted name in crypto custody, Grayscale has been a strong option for institutions wanting to gain Bitcoin exposure. In fact, it was reported in November that Grayscale held 2.69% of Bitcoin supply. Further, Grayscale appears to have a great relationship with the SEC. It does voluntary reporting to the SEC as an investment company, though it is not required to do so.
GBTC is also a great way to get crypto exposure into your IRA, in order to lighten the tax load.
Understanding GBTC Premium
First, you must recognize that GBTC is not an ETF. This means that Grayscale is not required to buy and sell shares in order to manage the NAV. Rather, it sells at a premium over the Bitcoin in the fund. Today it holds 0.00094825 Bitcoin per share and it declines slightly each quarter for management fees. As of close Friday, the premium closed at 5.6%. But in December it reached over 40%.
Premium in GBTC shares
