Why GBTC has so much premium over actual Bitcoin Price

notme

legendary

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Quote from: GGALINff on June 11, 2016, 03:11:45 PM

I own it - but sell it off from time to time to buy underlying. It never ceases to amaze me the premiums it commands though - it was 72% + recently

I think also that some hedge fund was buying it - dangerous because if they need to sell, it may trade at discount to BTC

When they sell is when you sell underlying to buy back in. Rinse and repeat.

GGALINff

full member

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I own it - but sell it off from time to time to buy underlying. It never ceases to amaze me the premiums it commands though - it was 72% + recently

I think also that some hedge fund was buying it - dangerous because if they need to sell, it may trade at discount to BTC

hector3115

sr. member

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Quote from: nanonymousx on June 11, 2016, 11:47:16 AM

Quote from: hector3115 on June 09, 2016, 07:24:47 AM

The biggest reason for the premium is that GBTC can be added to a persons 401K and they can avoid paying capitol gains taxes in the future when Bitcoin explodes.

What you said make sense, but I am quite surprised that a person is willing to pay nearly 50% premium. Maybe because GBTC itself is low volume, and it is the only choice for now.

When you think about the enormous Capitol gains that could come from bitcoin appreciation would make a $500 premium look like nothing at all

jackg

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https://bit.ly/387FXHi lightning theory

Quote from: nanonymousx on June 09, 2016, 01:34:14 AM

Is GBTC supposed to be 1/10 of Bitcoin price, with Bitcoin at $580, it should be $58, not close to $100.
I am very confused about this price, can anyone share some insight with me, much appreciated.

Prices are not controlled.
I think they are independent and it all based on supply and demand of these coins.

Quote from: MatTheCat on June 11, 2016, 12:40:17 PM

Quote from: nanonymousx on June 11, 2016, 11:47:16 AM

What you said make sense, but I am quite surprised that a person is willing to pay nearly 50% premium. Maybe because GBTC itself is low volume, and it is the only choice for now.

Cos it is illiquid low volume hookey shit, and someone, somewhere, is making a fucking killing in it.

Who buys an ETF trading at twice the value of the commodity that is meant to be backing it? There is no reasonable explanation for this.

As stated above, this is a separate currency that is controlled by searate markets.
It may be that the Bitcoin investors are holding off on greater pumps and dumps until after the block halving.

MatTheCat

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Quote from: nanonymousx on June 11, 2016, 11:47:16 AM

What you said make sense, but I am quite surprised that a person is willing to pay nearly 50% premium. Maybe because GBTC itself is low volume, and it is the only choice for now.

Cos it is illiquid low volume hookey shit, and someone, somewhere, is making a fucking killing in it.

Who buys an ETF trading at twice the value of the commodity that is meant to be backing it? There is no reasonable explanation for this.

nanonymousx

sr. member

Activity: 252

Merit: 250

Quote from: hector3115 on June 09, 2016, 07:24:47 AM

The biggest reason for the premium is that GBTC can be added to a persons 401K and they can avoid paying capitol gains taxes in the future when Bitcoin explodes.

What you said make sense, but I am quite surprised that a person is willing to pay nearly 50% premium. Maybe because GBTC itself is low volume, and it is the only choice for now.

mkc

hero member

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Quote from: zimmah on June 09, 2016, 06:19:45 AM

It seems like the investors believe a lot in Bitcoin, but for some reason do not to invest directly into Bitcoin or maybe they're not allowed to invest in Bitcoin directly for whatever reason.

Either way it's a very good sign, and it shows that China isn't the only one driving the market up.

I like your statement, Chinese is not the only one driving the market up. We need more participation and the price will go to the moon.

hector3115

sr. member

Activity: 481

Merit: 251

The biggest reason for the premium is that GBTC can be added to a persons 401K and they can avoid paying capitol gains taxes in the future when Bitcoin explodes.

zimmah

legendary

Activity: 1106

Merit: 1005

It seems like the investors believe a lot in Bitcoin, but for some reason do not to invest directly into Bitcoin or maybe they're not allowed to invest in Bitcoin directly for whatever reason.

Either way it's a very good sign, and it shows that China isn't the only one driving the market up.

nanonymousx

sr. member

Activity: 252

Merit: 250

Is GBTC supposed to be 1/10 of Bitcoin price, with Bitcoin at $580, it should be $58, not close to $100.
I am very confused about this price, can anyone share some insight with me, much appreciated.

Topic: Why GBTC has so much premium over actual Bitcoin Price (Read 1087 times)