Topic: GBTC Bitcoin Investment Trust Observer - page 16. (Read 262371 times)

Do they not have a point? It's not exactly liquid and becoming more tenuously related to the Bitcoin price by the day. The premium's gone from near nowt to near double. That's not a signal of a market that works very well.

"This bitcoin investment vehicle could be 'a disaster waiting to happen'": http://www.cnbc.com/2017/06/08/this-bitcoin-investment-vehicle-could-be-a-disaster-waiting-to-happen.html

https://seekingalpha.com/article/4079232-bitcoin-amd-deja-vu

The comments section is hilarious.

They're keepin' 'em coming: http://www.investopedia.com/news/why-buy-expensive-bitcoin-etf-instead-actual-bitcoin/

And, another one: https://www.bloomberg.com/news/articles/2017-05-31/bitcoin-exuberance-even-more-dramatic-in-lone-investment-trust

Here's another one: https://www.fool.com/investing/2017/06/02/the-sure-sign-of-a-bitcoin-bubble.aspx?yptr=yahoo

"It's Not An ETF" - Industry Expert Warns, Be Wary Of The Skyrocketing Bitcoin Fund

http://www.zerohedge.com/news/2017-06-06/its-not-etf-industry-expert-warns-be-wary-skyrocketing-bitcoin-fund

One thing to keep in mind is that if we have a hard fork, and you hold actual bitcoins, you will be able to hold them and ultimately spend them on the most valued chain. (You'll also be able to spend them on the other chain, of course). However, if you hold GBTC where you don't control the actual private keys, it'll be interesting to see what happens to the price of your shares through that time period, and you might not have the flexibility of your value being retained on both sides of the chain. Bitcoin Investment Trust might need to choose one or the other to back the shares, right? Thoughts?

Edit: Keep in mind that Xapo would be managing the actual private keys.

Looking at the history is a very good point.

(I'm bullish, and hold a position in GBTC. This is not advice, yadayada)

We spiked to over 300% on day one.
We spiked to nearly $150 on the spike to $500.

Lots of mainstream articles are coming out now. They are the first hours and days mainstream investors have considered GBTC as an investment.
There are some aspects to it that are different from a TSLA play these authors might have considered.
...and then they write from their position of ignorance.

You can't short GBTC. It's a pink sheet stock.
Most holders have to hold for a full year. The mix of people in this camp was originally very large, and is shrinking as casual investors enter the stock.

GBTC is a slow moving ship.
Historically, it has done two things that can cause investors to gnash their teeth:

It likes to price in the new high ahead of time.
It likes to shrug off minor corrections and adhere to its 1yr+ support line.

These writers are focused on spread.
Spread is a lagging variable here, and it can go much further out of bounds than is typically true, because of the aforementioned reasons.

Because of the risk/reward profile, I tend to wait until we seem to have a confirmation of top before thinking about exiting.
Most recently that was a rebalancing sell in the 400s vs the 500s.

All the articles regarding GBTC now ignore its past behavior, and smack of a first-days understanding of the investment vehicle.

Looks like it's going to open above 500.

https://www.youtube.com/watch?v=UPw-3e_pzqU

Yea, I hope so; in at 33, would like to get a nice profit and get back in when things settle down.

Yeah, but if the current BTC price rally continues into tomorrow, then this irrational exuberance involved in the GBTC premium might enable a $600 per share price tomorrow, which would mean that I got out too early.

It looks like you guys think GBTC's spread vs actually holding bitcoins will begin to shrink? Its been on a tear (GBTC).

"Long shareholders now not only have to deal with Bitcoin currency risk but also Bitcoin ETF demand risk. Even if the Bitcoin currency rate continues to rally, a reduction in ETF demand will begin to collapse the 106% premium and ETF long shareholders will have been conceptually correct in their Bitcoin currency rate play but will lose on the ETF’s premium contraction. From July to November 2016 the Bitcoin currency rates appreciated by 15% and the GBTC ETF was down 18%, but from November 2016 to the present, Bitcoin currency rates appreciated by 300% and the GBTC ETF rose 387%."

https://www.s3partners.net/Research/GBTC.php

That's good to hear. I'm currently short even BTC proper, and cash poor, so I may get wrecked in terms of the opportunity cost if this keeps up.

Bitcoin ETF Trading at Premium Due to No Stock Loans : https://www.s3partners.net/Research/GBTC.php
Not entirely buying their thesis.

Longer than I can stay solvent.  Good thing I have plenty of the real thing instead of overpriced shares that decay in BTC terms.

notme, how long can the market stay irrational?

People bought that dip to 370 when it opened, and now it's touched a higher intraday percent diff versus BTC than where the diff was on Thursday's close.  I'm currently like notme, waiting for the premium to shrink.