Topic: Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! - page 37. (Read 17264 times)

Some distress signal in the Grayscale Group:


Digital Currency Group Announces Plan to Purchase Shares of Grayscale Bitcoin Trust (OTCQX: GBTC)


DCG, will buy their subsidiary fund shares in the open market, using their free cash, so they are going to erase the negative premium. Maybe only the announcement of a potential buy will  help mitigate the negative premium.

Regarding the taking advantage of arbitrage opportunity or whatever the hell we want to call it, I don't really have any problem with anything that you said, mcun2000, except maybe I would try to attempt to flesh it out a bit better in terms of a variety of motives that largely add up to the same thing.

So in that regard, perhaps you have some folks getting out of GBTC to go over to another product, and we have some folks witnessing the existence of the new competitive product so they anticipate that the GBTC price might drop, so they decide to get out in order to protect the value of their own investment, and then others witness that the GBTC price is falling, and so they decide that they better get out because the GBTC price is falling blah blah blah, and then there may even be some folks who want to really attempt to take advantage of the momentum and push the price even lower because they see momentum in the negative direction, and so maybe in the end, you could be correct that a lot of the momentum might have already been used up if we see lowering trade volumes.. and some might be just waiting and trying to determine if they should get back in, blah blah blah.. because the bottom may have been reached. 

So in the end, I might be just saying the same as you, mcun2000, but trying to flesh out some variations of actors and sure, I had seen some of those theories about certain BIG players getting out or liquidating and sure there might be some truth to those claims but there may be some exaggerations in regards to some folks who want to see the GBTC price to continue to fall so they can buy more, but they do not necessarily want to put their own shares on the line by actually selling when they may end up getting reckt, so some times words (aka FUD spreading) might work better in a kind of practical sense than actually selling to push the GBTC price down.

I would agree. Like many others I think bitcoin is revolutionary. History will look back at bitcoin as having as big an impact as the introduction of fire, language, coinage, the printing press, the bible, double book accounting, bank notes, gun powder, the sextant, etc etc.

But going back to GBTC like you suggest, I wonder if de-leveraging is another issue that might be affecting the price. Michael Burry of 'The Big Short' fame has cryptically tweeted about how bitcoiners are ignoring the impact of leverage in the price rise, and the probable eventual crash.

Could it be that those who are arbitraging the premium (by buying bitcoin, waiting 6 months, and then selling GBTC shares) took advantage or entered during the 20k to 50k run, and now must exit. I'm curious if there's a way to determine this.

I use TDAmeritrade, and the volume for GBTC yesterday and I think all last week has been light. That would indicate that there was little buying in the secondary market, no? So, the price pull back from 58k left a dearth of interested buyers in the secondary market, at the same time that leveraged abitragers want to exit GBTC, and also at the time other bitcoin instruments are entering the market, all leading to negative premium.
 

As @darude wrote, bitcoin is the single, biggest chance in history to subvert the social status quo, redistributing wealth not on legacy powers, self-fulfilling mechanism and privileges, but only on smartness, maths and pure luck (yes, many of of were simply lucky to get into bitcoin so early).

So, instead of whining about society, you should try to stack as may sats as possible before the inevitable happens.

Now, please, let’s get back in topic, discussing the mechanism of the Grayscale fund, who none of us like, apparently, but is a contingent evil in our ecosystem.

You're being too non-specific and vague about who you are describing as fat cats.. grayscale folks or wallstreet folks?  and why does it matter?  Each of us needs to figure out ways in which we can attempt to do best for our lil selfies rather than getting worried about how much wealth someone else might have started with in order to get himself ahead, if that is what you are suggesting or even learning skills to manage other people's money including having or developing connections.



Not even worth engaging you on this nonsense.  Maybe you are suggesting that fillipone is one of these guys too... because according to you, he posted biased information in favor of grayscale and they are all undeserving.... hahahahaha

Whatever.  You gotta come up with at least a little bit better arguments in terms of attempting to understand what grayscale might be doing, where it fits in the picture rather than getting too caught up in the personalities of people that work there are have controlling positions there, to the extent that even really matters once you get passed some more important aspects of where grayscale fits in the scheme of things and are they playing any kind of distinguishing role in finances as such role relates to bitcoin (even if it might be currently diminishing, perhaps?)


I doubt that they are really special or smarter, except compared with you they are likely maybe more able to focus on their specifics skills rather than getting caught up on irrelevant discussions of personalities.


Well there are freemarket incentives built into bitcoin, but still there are wider structural systems that might incentivize insider collaborations, but still you are being way the fuck too vague and seemingly butt hurt about shit you cannot even prove when there are likely way more important things going on in terms of just figuring out how to manage your own situation rather than getting caught up in vague and conspiracy driven preoccupations about others... or maybe you are too worried about yourself as a victim when in fact there are ways that you can still profit in bitcoin even if a variety of financializations are happening and some people are involved in financializations such as grayscale - and figuring out ways to use it or to personally profit from it (of course some lose money too, if they play it badly).


You believe that since grayscale manages more than 600k bitcoins that they have some kind of control over bitcoin.. oh gawd.. you sound like you don't really understand how a fiduciary might have obligations...so you have hardly said one smart thing,  yet.


I personally don't give any shits about anything but bitcoin, but sure I understand that grayscale dabbles in a few shitcoins, too... but in the end, you seem to be muddling the concept of bitcoin and crypto, so I wonder if you even recognize any difference or you just have muddled thinking about all topics?



Nothing wrong with either attempting to be ahead of the game or to consider that you may well be participating in one of the greatest transfers of wealth in history -upon the receiving side - but still I don't see any reason to overly generalized or to be bitter about the whole process because if you have some or decent allocations in bitcoin then you are likely already winning, so why give any fucks about complicated matters of the status quo rich who may or may not be able to get off the sinking ship before it's too late?


Probably a lot more variation than that.. and some of them are getting into bitcoin, some have already gotten into bitcoin , and some will be joining us a wee bit later after the anvil falls on their heads.  In other words, there is quite a bit of variation, even if you feel you cannot relate to anyone in certain kinds of categories that you put them in.


some of them are likely better.

Some may well be worse..

There might be some serial killers in there, too... so that would be bad, obviously.


Like I attempted to suggest earlier, it is likely a vast majority are probably way the fuck smarter than you, because you sound bitter and even unable to relate to other people.. many people have way better social skills than you are demonstrating, which surely is a kind of smarts that you do not appear to have.


You can admit it, if you like.

I am not going to admit such a thing.


There is psychology and finances.. so good to attempt to be sound in both, in my humble bumble opinion.


I would not advise.


Sure, you could just give up if you believe that you have no options, and life is not worth living...

I don't see it that way, but it is not like anyone on the interwebs is going to want to spend time trying to help a seemingly bitter disgruntled and glass half full kind of guy.. but sure, there might be someone willing to help you if there is any way that you can be helped.. or figure out ways that you can help yourself to fix your psychology.. and maybe your finances too, the way that you are talking, currently.


Nothing wrong with being critical, but I don't see any reason to let these kinds of matters draw you down, there are a variety of ways to figure out areas of freedom for yourself, whether you are poor or not.


Does not seem to be easy to find these kinds of answers on the interwebs because there are a lot of different reasons that people figure out ways to have hope in life and they can also develop strategies to live within their means in order to be or become financially independent and successful... but success might not necessarily be financial independence for all people..


I think that average people can get ahead, but might not be easy, and surely bitcoin could well be part of such formula.. but they may have to make sure that they get their shit together before investing in bitcoin.. so figure out their cashflow, their other investments, their view about bitcoin compared with other investments, their timeline, their risk tolerance and their time, skills and abilities to research, plan, strategies and tweak their plans along the way which may include reallocating and trading.. perhaps?


You sure wrote a lot in order to arrive at that conclusion.. Did I just waste 30 minutes of my time responding to you?  Well I suppose this is a public thread, so maybe someone else might profit from this exchange of ideas?  Perhaps?

Ok, thanks for informing all of us. As a side note, just remember that unfortunately giving up is not really an option, as by default you're placed into the fiat system (so the choice has already been made for you) where you're guaranteed to loose. BTC is an option to exit that system and at least gives you a fighting chance, there are no guarantees but the more you educate yourself the better your chances become. But to each his own, now back to discussion on grayscale

Let's be honest Here those fat cats got wealth by just inheritance...
Or Went in private schools on their young age just coz they from nobility and up class family...
What make them so Special or smarter?  Non!
Its just they play together against others.
And Bitcoin belong to them so no point about crypto anymore If I invest in btc im depend on those wealthy fat rich guys who never worked in their lifes and never need to proof themselfes coz they all ready from higher class.

Yes the life is easy and wealthy for them but their personal development is zero.
They Can stay Only Behind their private vip schools diplomas but are they really better?
I doubt that they not even smarter.
Now they own Bitcoin so we might just admit Right to way we are slaves of them with no options at all
What we Can do?  Nothing even You try to do Something the the tax and government Will stop You down.
So What's the point to continue to play game named as success If the game is rigged and scam anyways? 
If we all Know that someone got just More privileges then we should stop being critical about Our lifes even we try 10000000 times hard we end up just fully exhausted and empty of energy.

Its better to give up in life and stop trying so hard to be financially Independent and Succesful.
The game is not fair so its Impossible for Acerage person to reach anywhere in life.

I give up no point!

I say keep it inside their walled garden and let retirement funds enjoy the discount at the cost of arbitrageurs  i.e. don't offer redemption and let it trade at discount until all absorbed on the secondary. Allowing redemption will just bring in a ton of market makers forcing the fund to sell real BTC on the market, which might cause further price decrease causing more people sell their shares raising the discount again etc etc  at least until US ETF comes online


Yeah pretty much what JJG said, math is under no obligation to you or anyone, honey badger don't care about entitlements or your feelings. Grayscale is just one tool to own BTC indirectly, and it's the easiest way to get exposure to BTC in a US retirement account. Just as a hammer can't do anything useful to you, but if you know how to use it you can build great things with it. fillippone has done a great job collecting the knowledge, tracking performance of this fund and sharing it with everyone so people can better understand it and make more informed decisions. As far as "wall street" they're just a primitive "animal" they only have one function, if there's profit to be made, they'll come (for better or worse)

What the fuck you talking about, cryptoboss2020?  Do you know any lil thing?  Have you read various posts from fillippone?  He does not appear to be promoting anything except providing information that you can take or leave, and apparently you, diptwat cryptoboss2020, want to sling a bit of mud about nonsense that you seem to not know shit about....

so anyhow, you seem to be starting off with a faulty premise (and seems to be almost purposeful that you want to read bias into a situation that is no where close to bias in its presentation of information.


Bitcoin's price is whereever it happens to be, and you can be grateful if you like or you can complain about it.. that's up to you, and I suppose if you are anxious about the whole matter and you wish the prices were higher than you might not be very grateful, but you are just coming off as a greedy and lame ass fuck, because bitcoin has had plenty price appreciation in the past 5 months, and whether it continues to go up or not, there seems to be a quite a bit of gratefulness that could be appreciated - especially 5x returns in 5 months...

And, even if the BTC price models are far from guaranteed, there could well be another 5x from here or even more in the coming several months or it could even take up to 18 months or so to play out in terms of reaching the top of this particular cycle.. that is if price cycles continue in the coming months and years in similar ways as to which the models suggest and also bitcoin's price history seem to lend decent probabilities to price cycles continuing to play out in the coming years.



Maybe you are correct about the point that bitcoin does not need wallstreet, but you frame the whole matter in a real cunty, greedy and entitled kind of way.  None of us are entitled to shit in bitcoin, but surely each of us are going to be better off is we prepare ourselves for BTC price movements that could go in either direction, even if the BTC price prediction models lend pretty damned decent probabilities that bitcoin continues to be in an UPpity price cycle.. but even decent probabilities do not mean shit if the BTC price ends up moving contrary to the probabilities, perhaps to teach some presumptuous twats like you that nothing is guaranteed, especially for presumptuous fucktwats like you, in bitcoinlandia.


You think that you deserve something?  And who is the "us" you speak about?  Do you have a rock in your pocket?

Are You part of grayscale?  Why Else You promote grayscale Here then?
And Why we should be grateful the Bitcoin is low Not even 100k 200k Price range.

If the Wall street are in at least they should send the Bitcoin Price Up Why else we need them in Bitcoin? 

Let the grayscale do Something useful for us

Very true. The selling pressure is going to be real. I am just curious how Grayscale is going to handle this new situation for them, as they have been riding the positive premium for years!

Also from your other graph % of locked shares is currently at 36,5% which is at the same level as it was in Sept 2020 when BTC price was around $10k. Still high, but will keep going down everyday the primary is closed/fund is trading at discount. At this rate we should be under 25% of locked shares by May 10th, and under 20% by May 24th, so might see discount till May after that things should come back to normal

Negative premium is becoming a thing in GBTC: yesterday it hit -11%.



That makes the shares in the secondary market quite a bargain!
But I am a little bit worried by now: where this selling pressure is going to? Flowing to another "ETF"? outright selling?

Also, from the spreadsheet: what is going o happen when those massive quantities of locked shares become freely tradable?

You are right, the biggest inflows we saw for GBTC almost perfectly coincided with the huge money printing activity that is being put forth since April 2020. I never thought that it could a be reason to push new ETFs at the door until the market doesn't go back to some form of normalcy.
After all, an ETF now will likely push the price to explode It's the most awaited bitcoin investment vehicle since a long time

I'm not sure why everyone leaves this out, but don't forget that you're comparing the spot price of the secondary market (closing price of BTC Trust shares at 4PM ET on OTCQX®) to the BTC's volume weighted average price for the last 24hr (based on a 24 hour VWAP of TradeBlock’s XBX Index) which is really not an ideal comparison. When markets go down during the day your spot at 4pm will almost always be lower than the average, same is true for the opposite, market sharply going up means your spot at the end of the day is likely higher then the avg for the last 24hrs (weighted by volume). Looks like spot TradeBlock’s XBX on March 4th 4pm was around $48.192 (https://tradeblock.com/markets/index conveniently they're also showing GDAXs discount at -8,01% today) with Bitcoin per Share at 0,00094685 that would put BTC's spot NAV at $45,63 vs  $46.83 (March 4th 4pm ET, based on a 24 hour VWAP of TradeBlock’s XBX Index). There's still a discount but it narrows the gap.

As far as speculating on the reasons, GBTC fees are 2% while Canada's ETF BTCC (TSX) appear to be 1% and EBIT (TSX) is at 0,75%, naturally once you have an option people would gravitate towards lower fee structures. I might be mistaken, but i don't think Canada's market are an option for US retirement accounts so until US ETF comes around GBTC (or similar fund) is your only option. GBTC is now closed and doesn't issue new shares, so inflows from retirement accounts into GBTC must absorb temporary outflows from regular accounts leaving for Canada. But there's a lag of people who bought at the primary and are currently locked in for 6month, so as long as there's net demand from pensions  for exposure to BTC, discount might continue for the maximum of 6month (baring US ETF).

tl;dr without US ETF discount should be temporary for the max of 6m. With the fiat printer going full Brrrr i'd be surprised to see US approve ETF, I'd expect them to hold out for as long as possible.

Here's a interesting comment on seekingalpha about the current GBTC discount:

https://seekingalpha.com/news/3669426-mulling-bitcoin-and-100k-is-grayscales-discount-a-buy-signal

"Three reasons Grayscale (GBTC) is trading at a whopping big discount to the bitcoin it owns: (1) New ETF products that don't charge a hefty 2% annual fee for holding your bitcoin may soon appear. (2) GBTC is not redeemable. If the GBTC discount becomes excessive, Grayscale still owns the bitcoin, but existing shareholders get nothing and can't get the bitcoin out. So far as I know, there is no mechanism to bring the share price into line with the bitcoin price, which is why Im not buying any more GBTC. (3) ARKK is likely being forced to liquidate its holdings due to redemptions. As ARKK holds its bitcoin in GBTC, forced sales into a declining market could be pushing down GBTC to a huge discount."

I had not considered the sale pressure from a possible ARK liquidation. I double checked ARK ETF's that have GBTC, and it is not ARKK. It is in ARKW (ARK NEXT GENERATION INTERNET ETF), where GBTC is the 3rd largest position (after Tesla and Square), at 8,309,914 shares with market value of  $344,030,439.60 for 4.77% weight of the fund.

GBTC has Shares Outstanding 692.3M, so ARKW holds 1.200% (8.309914M/692.3M). I'm not sure if ARKW selling a bit of their a little over 1% would cause such a large drop in GBTC premium.

But in any case, I think it might be a good time to add some GBTC!

I am following GBTC daily as I added it to my retirement accounts recently. When I added 3 weeks ago, the premium was about $6 dollars above btc price ($46 GBTC vs $40k BTC price).

Today the price closed at $41.40 vs BTC price of $47k. This is a massive $6 deficit.

I too am curious at the reason for the sell pressure...is it just some taking profit in the secondary market? or are they preparing to move to new BTC instruments like ETFs.

DaRude, nicely put.

I know the new ETF is Canada based but it'll be a good comparison to understand whether this tool will be the preferred investment vehicle for bitcoin exposure with no hassle or not. It may well be that the trust-like products will prevail, we don't know that yet.

We only need to wait that the US approve a fricking ETF to see what will happen here.

GBTC needs to rethink its strategy or it'll eventually collapse under its huge massive weight. Rumors are that some didn't like their last move.

Primary market just tracks BTC price and cannot collapse especially without redemption. Redemption would provide a floor for the secondary market. Not sure which better alternatives you're talking about, I'm not sure if US retirement accounts are allowed to invest in Canada's ETF on TSX as far as other OTC funds, as long as inflow funds are restricted from trading for 6m-1yr there should always be a premium on secondary market. GBTC has first mover advantage and that means volume, sure other OTC funds can offer lower management fees say 50bps, but with everything else being equal all that would mean that GBTC would be trading just 1.5% lower vs the other fund. I can't see how 2% management fees can cause premiums to go from 40% to a -2% discount.

All the premium discount means is that there are more sellers on secondary market than buyers. It might be simply because of the correction, or rumors of US ETF spooked the market or/and someone is front running the news. With shares trading at discount there's no reason to pay more at the primary and be locked in for 6m when you can pay less for exactly same shares and don't have any restrictions. All the "true" cash that was coming in the primary should theoretically now just come in on secondary, of cours without the in-kind trades and cash that was coming in simply to arb the premium.

We also know that with markets and players there can be a bit of an overreaction that goes along with momentum that causes the situation to be worse, seem more exaggerated than it is, become more exaggerated than it should be because of short term moves, and maybe even the company reaction could cause some opposite than intended effects.. so yeah, the extremes can cause more extremes that might not have really been there in the beginning and create kind of new reality merely because some investors are overreacting in anticipation to make money on the situation (or not lose as much in the short term).