Bitcoin Investment Trust (OTCMKTS:GBTC) is climbing today as Bitcoin surges on news that Blackrock is looking into the cryptocurrency space. The world’s largest asset manager is now sniffing at the door of the currency that was supposed to upend the system. In fact, only six months removed from lambasting cryptocurrency and bitcoin as an index of money laundering, the behemoth ETF provider is now “exploring” the crypto ecosystem.
A task force from Black Rock will report back to CEO Larry Fink with their findings. Fink is a little higher on blockchain, according to comments he made in an interview with Reuters. “We are a big student of blockchain,” Fink said, stressing that he doesn’t see “huge demand for cryptocurrencies” even though the firm has begun investigating them more closely. This type of interest sent a moderate price bump rippling across the crypto world and bitcoin, of course, climbed moderately. BTC saw a $300 increase – around %4 – and in turn so did GBTC. If readers are not familiar, the stock is a bridge between the crypto world and the investment community.
Bitcoin Investment Trust (OTCMKTS:GBTC) trumpets itself as a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables investors to gain exposure to the price movement of bitcoin without the challenge of buying, storing, and safekeeping bitcoins.
The BIT’s sponsor is Grayscale Investments, a wholly-owned subsidiary of Digital Currency Group.
Each BIT share represented ownership of 0.1 bitcoins initially. The trust will not generate any income and regularly sells/distributes bitcoins to pay for its ongoing expenses. Therefore, the amount of bitcoin represented by each share gradually declines over time.
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This is good news for GBTC and we may start to see the bulls return to the market. But, still, GBTC is a little controversial because of the hefty premium you are paying for the price of one BTC coin – waffling anywhere from 50% to 60% – and that is just pretty steep, even with the upside.
But, Black Rock coming to the table might bring out a lot more heavy-hitters. A previous company report by BlackRock, published in February, revealed the firm was taking a cautious approach to both cryptocurrency and blockchain technology.
“We see cryptocurrencies potentially becoming more widely used in the future as the market matures,” BlackRock’s Global Weekly Commentary said.
“Yet for now we believe they should only be considered by those who can stomach potentially complete losses. Similarly, blockchain needs to overcome significant hurdles to reach its promising future.”
But, Fink’s final confirmation was the signal the markets needed to truly embrace the notion.
Bitcoin Investment Trust (OTCMKTS:GBTC) has a market cap of 1.18B with 10-day volume at 1.8M. As we have stated before, GBTC is really about taking a risk and seeing what happens for those who don’t have the stomach for the real thing. If the price of bitcoin skyrockets, then you are in for a payday. We will be writing more updates on this stock as more news on this price increase comes to light. For continuing coverage on shares of $GBTC stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $GBTC, either long or short, and we have not been compensated for this article