Gbtc Net Asset Value – Bitcoin has lost -40% since hitting an all-time high of $68,000 two months ago. If you’re thinking of increasing your exposure to Bitcoin, you can buy it at a 20% discount. How?
Grayscale bought shares of Bitcoin Trust ($GBTC), which is currently trading at a more than -20% discount to its net asset value:
Gbtc Net Asset Value
The discount/premium to NAV is the interest that an exchange traded fund or closed-end fund charges on the amount sold above or below its net asset value. This indicator can be a valuable indicator for tracking how far a stock is trading from its true value. Source: ycharts.com/companies/GBTC/discount_or_premium_to_nav
Biggest Bitcoin Fund’s Woes Worsen As Discount Hits Record
Shares of Grayscale Bitcoin Trust can be bought and sold through any brokerage account such as: Interactive Brokers, as well as buying or selling shares of other publicly traded companies such as Amazon, Apple or Google.
In theory, if the current market price is $41,000 per Bitcoin, at a discount of -21%, you would buy a Bitcoin for $32,390.
The US Securities and Exchange Commission has delayed a decision on a bitcoin exchange-traded fund (ETF) offering by Grayscale Bitcoin Trust, the world’s largest digital currency manager. In a news release on Wednesday, the markets regulator said it now expects to review Grayscale’s proposal by February 6, later than the original December deadline. In October, Grayscale, which has more than $45 billion in cryptocurrency assets, said it plans to convert its Grayscale Bitcoin Trust ( GBTC.PK ) into a spot bitcoin ETF. Source: reuters.com/markets/us/us-sec-delays-decision-grayscales-spot-bitcoin-etf-2021-12-17/
James Seyfart @JSeyff I want to point out something that may have been overlooked about the #Bitcoin ETF approval (and $GBTC ETF conversion) I wrote in December. We have two Bitcoin futures ETFs going through the infamous 19b-4 process for the first time since $BITO was approved. 1/x 19:07 ∙ January 5, 2022 138 likes 31 tweets
Bitcoin Lic Is A
At the end of the day, issuers are hitting the SEC’s arguments in different ways, but I’m still very pessimistic that we’ll see a Spot #Bitcoin ETF in 2022. The Security Council categorically opposes this. If given a chance, I’d say about 20%? Is it possible?
If the SEC allows Grayscale to convert GBTC to an ETF, the discount will disappear. We expect the agency to use bitcoin futures ETFs as a stepping stone.
So it might not happen in 2022, but it could be a nice return when the discount wears off:
Historically, the range of premium/discount to net asset value has ranged from +132.6% (May 31, 2017) to -23.69% (January 5, 2022) and the reasons for this are explained here: Link to World’s Largest Bitcoin. Financing personal problems.
Grayscale (gbtc) Spot Bitcoin Etf Comes With A Catch
It is a good idea to only buy $GBTC when there is a big discount to net asset value and avoid buying when it is at a premium, otherwise you could end up with:
Katie Greifeld @kgreifeld Bitcoin Returns ~60% in 2021 $GBTC Up 7% ∙ Jan 3 19:55 ∙ Jan 3, 2022 154 Likes 14 Retweets This post contains affiliate links. We may receive compensation when you click, register, deposit or spend money on a designated platform. Learn more.
A Bitcoin Investment Trust (GBTC) is the only option for investors to trade in the Bitcoin stock market, and investors typically pay a premium for it.[1]
Below we explain the pros and cons of Bitcoin Investment Trust (GBTC), GBTC, and why GBTC is a better investment than Bitcoin in some ways (but not in others).
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What is trust? A trust (investment trust) is a company that owns a fixed amount of a specific asset (such as gold or bitcoin). Investors buy trust shares and raise money by holding contracts that represent ownership of the trust’s assets. 1 share in a gold trust can be worth 1/10 of gold. In Bitcoin trust, 1 share is equal to 1/1000 of a Bitcoin (was about 1/10). The trust is managed by the company that receives the payments, in the case of GBTC this company is Grayscale.
Is GBTC The Only Bitcoin Stock? For a long time, GBTC was the only stock traded on NASDAQ.com or any public stock exchange in the United States that had Bitcoin as its underlying asset. It was also one of the only options to invest in Bitcoin without buying Bitcoin directly. However, that all slowly changed over the years as other competitors entered the market and companies like Microstrategy bought more bitcoins. GBTC is not the only way to invest in Bitcoin. GBTC is currently one of the few choices for investors looking to use the stock market to trade cryptocurrencies, along with other Grayscale trusts. Other trusts include the Ethereum Investment Trust (ETHE), the Ethereum Classic Investment Trust (ETCG), the Litecoin Trust (LTCN), the Bitcoin Cash Trust (BCHG), and the Digital Large Cap Trust (GDLC). Please check the Greyscale site for current premiums before purchasing these tracks! A small reward is good, a large reward adds a lot of risk. Learn about other ways to invest in cryptocurrencies like Bitcoin.
GBTC is Bitcoin Investment Trust, 2000, 906, 600 shares on August 31st 906, 86822222222, 700 shares on August 31st. 2017, but the stock split; See update and clarification below; see also current holdings).[2]
In other words, the trust owns about 63,890 bitcoins, and people can buy trust shares, each of which represents ownership of 0.001 bitcoin (so if you own 1,000 shares, you own a contract that owns about 1,000 shares for .1 bitcoin). This will change over time due to payments and the addition of Gray’s gender to Bitcoin and other changes, but that’s the gist of it.
Grayscale Tempts High Rollers With Zero Premium Gbtc
It’s like GLD, which is a gold trust; Where each gold trust share represents approximately 1/10th of an ounce of gold held in custody.
GBTC Stock Split 2018: GBTC Trust stock split 91 -1 in January 2018. Each share used to be about 1/10 of a bitcoin, now each share is 1/1000 of a bitcoin.
Specifications are subject to change: the amount of BTC owned by the trust and the amount of BTC per share, including issued shares, and the 2% annual fee paid to the trust may change over time. For example, as of August 2019, stocks are 244,951,500, compared to 175,984,800 in February 2018, and Bitcoin is 0.0009775, compared to 0.00100721 in February 2018.
Note 2022: GBTC is selling at a huge discount starting in 2021. The discount is so permanent and deep that it is what the rest of this article will discuss. Before that, the discount was decreasing enough to make GBTC somewhat viable. Still, one idea is that in the long run, buying BTC at a discount could be a great move.
The Block: Gbtc Sinks To Record Low — Trading At A 19% Discount
GBTC is a great buy for the casual investor who doesn’t want to trade cryptocurrencies in general (but wants to trade Bitcoin). However, it can sometimes trade at a very strong premium (due to high demand and limited supply).[3][4]
The premium, which is the difference between the market price and the value of its owners, can be very uncomfortable and can be related to the volatility of the Bitcoin market, but it can bring more benefits than the income offered by Bitcoin itself.
In short, the premium makes GBTC a risky bet bought at a high premium (even riskier than Bitcoin itself).
However, there are still some reasons to choose GBTC over Bitcoin (especially if you get in when the premium is low or when Bitcoin is rising, as the premium increase means you can beat BTC returns with GBTC at the best of times. ).
Gbtc Discount Hits All Time Low As Sec Mulls Bitcoin Etf
Tip: Check out the two charts above and below where I show the local asset value (NAV) and market price. When the market price is higher than the NAV (ie the price the market is willing to pay is higher than the underlying price, or what the holding is actually worth), this is a “premium”. The same logic applies to ETCG.
Tip: Liquidity and limited supply will increase the price of GBTC. Anyone who argues that GBTC should trade for the value of Bitcoin (cough; Andrew Chapp) and not for cryptocurrency may not understand or recognize how much of a profit it is to trade with confidence. A 120% premium is obviously absurd, but trading with confidence at or below the price of Bitcoin is even more absurd. A premium of 20% or less would probably be a more reasonable trade until another Bitcoin ETF comes out (but of course the market sets the price, not logic). Expect GBTC to trade at its “Net Asset Value (NAV)” “if” more cryptocurrency-based ETFs hit the stock market. Before that, you have to look
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