Topic: GBTC Bitcoin Investment Trust Observer - page 18. (Read 262371 times)

I didn't even notice that the intra-day had gone that high. It actually touched $191 earlier yesterday. Tomorrow should be interesting, given that today's BTC flash crash was short-lived but seems to have impacted the GBTC close.

GBTC has been on quite a roll now that BTC is of course. Just saw the price is $189. With Japan going full bore into bitcoin and institutional investors taking more notice it may have more legs up.

At least you know can see lower premium wasn't because ETF approaching... lol

GBTC the only game in town for retirement accounts...

Given their rationale in denying COIN, it looks to me like GBTC is going to be the best we get on this front for a while: https://www.sec.gov/rules/sro/batsbzx.htm

http://www.coindesk.com/winklevoss-bitcoin-etf-decision-may-come-us-stock-market-close/

I have GBTC and am holding; I don't want to miss a run up.  If COIN becomes a reality then I will evaluate jumping to it.

I think GBTC speculators have the biggest risk exposure by far. They will sit and watch for two days what happens to BTC before they can dump or buy in.

I think GBTC holding steady right now is the biggest indicator that nobody has a clue what his going to happen with the COIN ETF....

It should be fun to see how GBTC trades right before the market closes today if there's a late afternoon COIN decision.

Thanks, I did not know Greyscale was filing to be on NYSE, maybe they would change the fee structure then to be more competative.  I believe they are charging 2%, by comparison the GLD ETF charges 0.40%

That's a fair point, and I'm not saying you're wrong, but that's a long term decay that will occur very slowly relative to the BTC spot price, and I'm more concerned with what will happen in the near term given various ETF approvals. In my mind, that fee might even be adjusted to a lower percentage given the reality of the competition once COIN and/or SolidX are approved. Also, Grayscale Investments has filed their own S-1 registration statement with the SEC to actually list it on the NYSE, so that would also change up how it gets priced.

Yes, but that is not uncommon.  The SPDR Gold ETF [ticker GLD] does the same, fee's imbedded into the price.  The previous "premium" seems to have come from a supply demand issue [no other trust available].  If COIN gets approved then GBTC should have a discount going forward.  If it doesn't get approved, perhaps the premium will return but on a lower notional price.  I was an early investor in GBTC, I went that route because I didn't want to store keys [web based or in an offline wallet] and worry about the funds being hacked or lost.  I also was buying on auction [through SecondMarket], so there were a lot of conveniences of using GBTC at the time which was a private trust that became listed later.  But I agree, the decaying price due to high fee's is not ideal.

They are worth less because they are guaranteed to decay due to the fund's fees.  Each share started at 0.1 BTC,  but is now 0.09336483 BTC.

Given that the underlying BTC represented by a GBTC share would still be worth just the same as any other such amount of BTC in such a scenario, I'm curious to know how much of a discount people think GBTC would trade at versus BTC, also given that COIN wouldn't be immediately available after approval.

If COIN is approved [25%] then GBTC will trade at a discount,  If not [75%] then BTC will sell-off.  So I'm guessing prudent investors are dumping GBTC to buy it back lower if COIN is not approved, or dumping GBTC and buying bitcoin direct to avoid the discount.  <-- It makes sense to do the latter with part of your position as a hedge and that arbitrage will create the price discrepancy.  I'm still trying to figure out how I want to trade it,  either of the above options will generate a large capital gain tax burden if you bought much lower.

Well, at least we avoided it today, but yeah, it's only happened once before, October 28th, 2015, where it dipped to negative 0.29% on close. The high in the recent past got up to an almost 100% premium, back in June of last year.

First off, GBTC isn't built to perfectly track the BTC price, given the year holding period before the shares can be sold OTC. Also, it doesn't have the same amount of volume/liquidity. My take is that some whales have decided to sell off whatever GBTC premium that there is on the market while they can, given that, if COIN is approved, there will be less of a premium. They might also be doing some sort of longer term arbitrage, where they're finally able to sell their shares, and they've decided to do so and then buy BTC directly.

Others have made the point that GBTC shouldn't significantly trade below the value of the underlying BTC for any large timeframe, because the shares could be redeemed for actual BTC if necessary, at least that was my understanding, but I'd like confirmation on that. If it's true, I'd also like to know how tedious that process is, which, if difficult, could further contribute to individuals selling below fair value to liquidate their holdings. Some shareholders also might not be able to take on the underlying BTC for technical reasons or tax account reasons, depending on how they're held.

One other reason that could cause GBTC to sell at lower than the underlying market value would be if the underlying BTC that's held at Xapo ever got hacked!

Just COIN as far as I know.  However, consider that COIN will be a stable 0.01/share and should track very closely.  Since GBTC has fees that eat at the btc/share, it makes sense that in a competitive market it would indeed trade at a discount.

This seems extreme, especially since premium has been so high in the past (up to 80% wasn't it?).

Any ideas what's going on here, I know ETF is muted as a reason but could it be something else also?

We might break negative on the premium soon. Watching the intra-day price moves today it touched something like 1.65%.

Yep, we barely missed it if you use those as your figures, with one share currently equal to 0.09336483 BTC.

Since my previous source of daily BTC prices stopped being updated back in October, I started using the BitStamp Weighted Price from the following data set (one could also use the closing price from there, but the weighted figures matched my previous source slightly better): https://www.quandl.com/data/BCHARTS/BITSTAMPUSD-Bitcoin-Markets-bitstampUSD

Based on that, you get:  (115 - (0.09336483 * 1192.35)) / (0.09336483 * 1192.35) = 0.0330, or 3.3%, slightly beating October 26th, 2015, to take third lowest.