Bitcoin Investment Trust (OTCMKTS:GBTC) is an open-ended investment trust specializing only in buying bitcoins. For readers unfamiliar, when you purchase one share of GBTC, you become the owner of 0.00099063 of a bitcoin. Obviously, that number is rapidly changing and GBTC is mercurial as a shadow. The stock has lost a majority of its value this year and its 2% fee might start to seem like a real dagger in the back to investors who are certainly under water (But, with no real competitors, Grayscale is not under much pressure to lower fees).
The price of bitcoin has fought back in late December as uncertainty on Wall Street has led some investors to reach for cryptocurrency as another store of value. However, the rally on BTC has tapered off as many still cannot put their sole trust in any cryptocurrency.
Bitcoin Investment Trust (OTCMKTS:GBTC) acts 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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“Record inflows however have resulted in record bitcoin equivalent holdings with December notching up a little versus the start of the previous month.”
GBTC has $826.3 million in assets meaning it owns 1% of all bitcoin. Since the start of 2018, Grayscale, owned by Barry Silbert brainchild Digital Currency Group (DCG), has seen its Bitcoin coffers swell by 30,600 BTC to 203,000 total. This information was gleaned from their Digital Asset Report. Notable is the fact that the firm says that 56 percent of those new investments, or $5.3 million per week, have been coming from institutional investors—a group of investors notorious for shunning cryptos in the past. The company offers eight different cryptocurrency investment products including Ethereum Classic Investment Trust , Zcash Investment Trust and Digital Large Cap Fund, an index product.
Bitcoin Investment Trust (OTCMKTS:GBTC) has a market cap of 811.52M with 10-day volume at 3.42M. GBTC has volume but investors need to consider the long-term outlook here. If you are bullish on bitcoin than GBTC is a nice entry way into BTC that is maybe safer than the actual coin, plus, you are getting a discount if you see the coin going up– during Bitcoin’s heights, GBTC traded at $39 a share. 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