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What is Grayscale Bitcoin trust?
It was founded in September 2013 as The Bitcoin Investment Trust as a private placement to approved investors, and later gained FINRA approval for qualifying shares to trade publicly. Investors can buy and sell public shares of the Trust under the symbol GBTC.d investment vehicle, according to Grayscale Investments, with shares named in the investor's name. Even though Grayscale's Trust is not an ETF, it claims its basis is in popular commodities investment products such as SPDR Gold Trust, a physically-backed ETF.
Under the Alternative Reporting Standard, GBTC trades on the OTCQX, an over-the-counter exchange for companies that are not required to register with the Securities and Exchange Commission (SEC). Its success is comparable to that of Bitcoin, since its value is based entirely on that cryptocurrency. GBTC had approximately $2.16 billion in AUM and 2.4 million shares outstanding as of September 11, 2019. Investors who wish to subscribe to the Trust as a private placement must invest a minimum of $50,000 and pay a fee of two percent per year. The GBTC public quote can be purchased for as little as one share.
According to Grayscale, the fund's management is worth more than the annual cost, and its security is one of its main selling points. Grayscale promises investors the Grayscale Bitcoin Trust's assets are "protected by a strong security system that adheres to industry-leading security standards." Since GBTC is an over-the-counter investment, buyers and sellers can trade it like any US security. For instance, GBTC can trade through a brokerage company or tax-advantaged accounts such as IRAs or 401(k)s.
Under the Alternative Reporting Standard, GBTC trades on the OTCQX, an over-the-counter exchange for companies that are not required to register with the Securities and Exchange Commission (SEC). Its success is comparable to that of Bitcoin, since its value is based entirely on that cryptocurrency. GBTC had approximately $2.16 billion in AUM and 2.4 million shares outstanding as of September 11, 2019. Investors who wish to subscribe to the Trust as a private placement must invest a minimum of $50,000 and pay a fee of two percent per year. The GBTC public quote can be purchased for as little as one share.
According to Grayscale, the fund's management is worth more than the annual cost, and its security is one of its main selling points. Grayscale promises investors the Grayscale Bitcoin Trust's assets are "protected by a strong security system that adheres to industry-leading security standards." Since GBTC is an over-the-counter investment, buyers and sellers can trade it like any US security. For instance, GBTC can trade through a brokerage company or tax-advantaged accounts such as IRAs or 401(k)s.
The Grayscale Bitcoin Trust (GBTC) is a financial instrument that allows investors to gain exposure to Bitcoin (BTC) without having to directly purchase and store the cryptocurrency. It is the world's largest single-asset digital currency investment product, with over $32 billion in assets under management as of July 2023.
GBTC operates as a security, trading over-the-counter (OTC) under the ticker symbol GBTC. Each GBTC share represents a fraction of a single Bitcoin, with the price of the share fluctuating in tandem with the price of BTC. Investors can purchase GBTC shares through a broker or on certain cryptocurrency exchanges.
Despite its popularity, GBTC has drawn criticism for its premium, which is the difference between the price of a GBTC share and the actual value of the underlying Bitcoin. The premium has historically been high, sometimes reaching 30% or more, reflecting the demand for GBTC shares and the limited supply of GBTC units available for trading.
In 2022, Grayscale filed an application with the U.S. Securities and Exchange Commission (SEC) to convert GBTC into a spot Bitcoin exchange-traded fund (ETF). However, the SEC has yet to approve the application, citing concerns about the underlying Bitcoin market and potential risks to investors.
GBTC operates as a security, trading over-the-counter (OTC) under the ticker symbol GBTC. Each GBTC share represents a fraction of a single Bitcoin, with the price of the share fluctuating in tandem with the price of BTC. Investors can purchase GBTC shares through a broker or on certain cryptocurrency exchanges.
Despite its popularity, GBTC has drawn criticism for its premium, which is the difference between the price of a GBTC share and the actual value of the underlying Bitcoin. The premium has historically been high, sometimes reaching 30% or more, reflecting the demand for GBTC shares and the limited supply of GBTC units available for trading.
In 2022, Grayscale filed an application with the U.S. Securities and Exchange Commission (SEC) to convert GBTC into a spot Bitcoin exchange-traded fund (ETF). However, the SEC has yet to approve the application, citing concerns about the underlying Bitcoin market and potential risks to investors.
Jan 25, 2022 06:00