Topic: Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! - page 43. (Read 16372 times)

Surfing news-feed on Coinbase. It's impressive, isn't it?
In the past week, Grayscale has added an additional 14,591 Bitcoin & 105,000 ETH to their holdings.


Many people do not like and the objection is, it is not right for a group to have a significant amount of BTC.
But the biggest fact is you can't prevent them. Many may wonder why the price of Bitcoin is not crossing ATH after they investing so much.
In response, They just buy Bitcoin and sell the share, generally, they buy bitcoin directly from the miners at a lower price.
Ever wondered what would happen when miners won't have enough bitcoin to sell!

Buy shares with the supports from Grayscale but what those buyers (also clients on Grayscale) have to do to cash out if they want to take profits. Will they have to do this action via Grayscale? Submit their sell requests/ tickets and wait for acceptance from Grayscale? How long the process can take or it can be done immediately (few seconds or a few minutes)?

From last part of your post, I got the idea that Grayscales allow clients to be free to buy or sell shares of bitcoin on Grayscale' secondary market and it is a 24/7 market. Is it right?

No, registered clients, or rather accredited investors, can actually buy shares (not bitcoins) from Grayscale. They buy them at NAV value, without the premium usually attached to shares in the secondary market, the one all of us can access to.
Also they can buy shares with an in-kind purchase. This means they can purchares shares representing bitcoin with actual bitcoins.


 All clients, both registered or unregistered, sell their shares to other clients. Grayscale is never involved in the secondary market, not they mandated any market maker to develop a liquid market.

They state in the website:

Which selling? According to my spreadsheet Grayscale had 8 negative days. The last of those happening in Sep 2014. Client Buying shares greatly outnumber clients willing to sell. Net movement so is almost everyday net positive.

I've read the description but I still can't understand how Grayscale market works and whether it is different from a ponzi. I have several questions:
1. From whom registered clients purchase Bitcoins - from Grayscale (with a premium I guess) or from other clients like a regular exchange works?
2. To whom registered clients sell Bitcoins - to Grayscale or to other clients?
3. Who is forming the buy/sell prices - Grayscale or the clients?
4. Everyone is talking about Grayscale buying bitcoins, but what about selling? Are they selling in the spot market at all?

I recently bumped into ByBit Grayscale page.

It's s a nice summary of Grayscale, with various information:


[link]

Well, I wanted to doublecheck those information with the ones I already Enclosed on my Spreadsheet.
The result is that they overlap almost exactly:



[link]

There are a few notable differences:

• My Spreadsheet don't consider days where markets are closed, to it is actually a snapshot at Friday's COB values. The website instead updated at fixed times during the days, hence the flat difference over the last day (+ 0BTC vs Yesterday). During the week the worksheet are aligned. There is a little difference on the 30 days difference: I still have to understand why.
  
• I added a few information I think are relevant, and I already calculated in the spreadsheet: Restricted Shares (i.e. shares aren't freely available on the market to sell), total Grayscale holding in %age of total mined Bitcoins and the sum of daily fees for Grayscale, considering a 2% annual feed on the outstanding amount.
  

Well, this is an interesting point.
2% there would be a very competitive cut indeed. Usually those kind of operations runs at 30% cut.
I don't know the technicalities here. I guess it would be difficult to pass the KYC/AML assessment while providing your Bitcoin (I guess the most probably way of doing a wash would be trough a in-kind buying).
I don't think it would be easy, but maybe possible.

I get what you mean man, but remember grayscale is not for us (otherwise they would have never reached those massive numbers). That is the price to pay to get exposure to btc for those overly rich companies, trust and entities which drown in useless fiat and need to diversify into btc.
May I be provocative here? What if we are in front of an institutional washing machine?
Who knows.

November has just ended, and it was a truly impressive month for Grayscale.

In November Grayscale bought more Bitcoins than they did in September and October Combined.



They are regularly outpacing (don't nitpick September) the daily mined bitcoin number since last August, I said many times that this comparison is quite naive, but it serves the idea quite well.

This put them in pace for a monster fourth quarter:



They are projected to buy more than 130,000 Bitcoin until the end of the year. I think they are actually going to easily beat that number, unless they close the primary market.
130,000 Bitcoin is an outstanding number, comparable with Q3 and Q2 combined. This would put EOY Grayscale AUM in Bitcoins at  over 580,000 BTC, or more of 3% of mined Bitcoins.

This is the commercial, I think:



https://youtu.be/_BIDcmh_6Es

It payload is :”Drop Gold”
Bitcoin, as digital gold, do what gold does, but in a better way.

Of course the spot exaggerates the benefits of bitcoin over Gold (an heavy and not so mobile metal, difficult to store), without mentioning any eventual drawback ( hints :10 years of successful story, versus millennial successful story).

Of course gold has utility and industrial value, but this is a very tiny percentage of the commercial value, which is dominated by the financial value due to scarcity.
 Otherwise other metals, way more useful, but more common, like silver or palladium, would have surged as store of value.

On the other hand, what has more utility: a gold plated stereo jack, or the possibility to to send trustlessy and in an un-censorsble way money on the other side of the planet? (I.e: using bitcoin without SoV properties)

ok so i just saw a grayscale commercial on tv, maybe an old one as i dont watch much tv really. it was the one where everyone is schlepping around gold bars and dropping it and such.

one thing that struck me as odd is they said something like "unlike gold bitcoin has actual utility." gold, being a noble metal, does have some utility as its good in electronics, most good connectors (like in audio, electronics slots, plugs and such) as its corrosion resistant and lowish resistance etc.

now its a very small percentage thats used for its actual physical properties as opposed to just storing it in bar/coin form or admiring how shiny it is in jewelry etc. so i supposed thats just a slight exaggeration but still.. kinda bugged me.

gold: exchange of value, storage of value, physical utility (small percentage)
btc:  exchange of value, storage of value.

maybe im too picky..

edit: for those who dont know me, im more btc vs gold myself of course. but both are handy to have for various reasons.

Are you kidding me? Many ETP’s (general definition for Exchange Traded Products) have a 0.25% fee. Some have a 0% fee. 0.50% fees means there is a special feature on those.
Also do you know how much is it 2% yearly? If you buy a single bitcoin in GBTC after 5 years of holding you are left with 0.904 BTC.
I don’t like that.

All asset and wealth management firms rip-off their clients with unnecessary fees and premiums on their services. It doesn't matter if it's bitcoin or oil or an AI technology index. They will suck the lymph out of their clients' money to grease their never-ending mechanism.
It doesn't surprise me. And 2%, to be honest, doesn't look very high to me.

Grayscale is a middle service for their customers. It is not a fair and exact comparison but can consider the interests Grayscale have from customer investments like what crypto exchanges get from trading volume on their exchanges.

The higher the volume is the bigger income from trading fees exchanges will earn. Their earnings are from percent of trading volume and the distributions of taker, maker fees on their exchanges. Some big exchanges accept to list shit DeFi tokens only to get earnings from trading fees and listing fees. Small exchanges have more reasons to list shit tokens or altcoins.

Grayscale contribute to increase bitcoin adoption and they shed a light for institutional invesments, I appreciated it.

It’s a love-hate relationship the one I have with Grayscale.
Love, because they are eroding bitcoin whales stash, putting bitcoins back into circulation instead of letting them buried in some obscure cold wallet. And ultimately bitcoin has value if someone uses it, we cannot be all holders!

Secondly, Love because this transfer from weak hands to strong hands is what makes the stock to flow work like a clock.
Third, also love because they are a tremendous organisation. They know their work very well and operate with sheer efficiency in what they are doing.

But I also hate them:
The first reason why I hate them is because they take no risk, this is not their money, it’s client’s money.

I hate them because they rip-off the final user, the retail one:they have a 20%+ premium on their BTC funds. And when you get your precocious shares, they start eating straight away an outrageously high 2% fees. 

Third I hate them because they can do so because they are a monopoly. In Europe we have several ETP: none of them has a significant premium over the NAV. yet all of them have a 2% management fee: the competition is going to hear in that direction.

Fourth I hate them as they will be wiped out by a SEC approved ETF in the US. In a matter of weeks their coins would flow towards the leaner, cheaper structure. I am not suggesting they are lobbying against it in the US, but the chunk of business they would lose is Huygens!

Ah. I also leve them because of this thread!

I don't exactly feel sorry for the hedge fund crowd.  Beyond that I'm honestly not sure how to feel about it.  Is it maybe a good that they're on such a secure financial footing with a lucrative business model if they're holding vast sums of BTC?  I certainly don't think it would be beneficial to see headlines about them having money troubles if they're so closely associated with Bitcoin now.  If it's inevitable that institutional investors are going to get involved, arguably it's better if the ringleaders of the circus aren't taking any adverse risks?  Or have I got this all wrong and maybe they're using that extra premium to continually eat the green candles?  Are they taking a big risk in buying so aggressively?

Grayscale has been sucking bitcoins like a giant supermassive Blackhole lately:



They bought more than 150,00 bitcoins on the last 100 days lately, and they are accelerating:



They are buying more bitcoins than ever, and they are not being stopped by high BTC numbers: actually they are increasing the rate (Giffen Good yet to be dismissed).


Just to derail the thread one moment.
 I want to highlight the nonsense hidden is some numbers here in the following daily recap


https://twitter.com/Grayscale/status/1333528369737199616?s=20

This is fucking ridiculous: look at the premiums!
Let's put it on a spreadsheet to better understand what we are talking about:



Who's so desperate to buy Liteocoin at 5,100 USD? I would sue my fund manager (if I had funds to manage) if I find such a purchase on my balance.
Not to mention Bitcoin Cash at 4,100 USD.

The Grayscale Bitcoin Trust is a supermassive black hole that is devouring all the institutional fiat money looking to be profitable over the long run. I should be impressed but I am not because this was inescapable. Thanks for your timely updates how can you cope with them so fast  

Apparently a hell of lot of money is going to be poured on GBTC:


https://twitter.com/kerooke/status/1332814031179165697?s=20

This is a lot of money. And a typical case of someone not being able to get exposure directly on BTC, hence ending up paying 2% annual fee to Grayscale for holding their coins.
Please note that this is a real investment: Guggenheim are putting their own money at risk, not client’s.
Brace yourself for another 25,000+ BTC on Grayscale (worth more than 1.5 BTC daily, riskless)

In this case, as I wrote in my above message, Grayscale is the perfect toy to you: tax deferral is only one of the plus you have into this game. Playing the arbitrage game might be another one.
Guess what: being an accredited investors has no downside, basically!

I am an accredited investor and I would be contributing bitcoin in kind so I dont have a taxable event. I would get shares equal to the value on the NAV and not pay the premium. The goal is if btc does something crazy and goes to 100k, I could take a loan out for near nothing, against my shares and never have a taxable event.