Bitcoin Investment Trust (GBTC)

J

John9999

I thought I would start a thread on this to see what folks have to say. So far this looks exactly like what I have been searching for. This is a ETF that invests in BTC. It is offered by a company called Grayscale and trades on the US exchange OTCQX. So, we get the oversight and regulations of that are offered on all US Exchange investments.
It appears to move similar to BTC but not dollar for dollar. Like today,,, BTC is up 10% and GBTC is up 20% ? Anyone have input on that price action?

Anyway, I just was not comfortable investing/trading BTC on the no-name exchanges and using a wallet. With this I can use an IB account or pretty much any company and get into the asset class.

Thoughts? Comments?
 
John9999 said:
I thought I would start a thread on this to see what folks have to say. So far this looks exactly like what I have been searching for. This is a ETF that invests in BTC. It is offered by a company called Grayscale and trades on the US exchange OTCQX. So, we get the oversight and regulations of that are offered on all US Exchange investments.
It appears to move similar to BTC but not dollar for dollar. Like today,,, BTC is up 10% and GBTC is up 20% ? Anyone have input on that price action?

Anyway, I just was not comfortable investing/trading BTC on the no-name exchanges and using a wallet. With this I can use an IB account or pretty much any company and get into the asset class.

Thoughts? Comments?
More...


It can trade at massive premiums and discounts to BTC. It's very dangerous. In most cases you are paying an insane premium to the actual coin. A few months ago it was trading at a 100% premium and within days it crashed 50% while BTC went up! It will rarely trade below the fair value of BTC and when it trades at a premium you can't short it. The only time to buy it is when it trades near fair value, which is rare. But then you have the conditional set of circumstances that when that event happens, do you want to be long BTC? Perhaps not. So you need to wait for BTC to be at the price you want "and" for GBTC to be at or near fair value of the coin itself. This will be very rare by definition. You are probably better off trading the real coin or waiting for the futures.
 
No, you can't. GBTC is NOT an ETF, it's an unregulated trust.

Thus it doesn't have a creation/redemption process with an approved counterparty->nobody to keep prices in line with the cash price.

GBTC is probably the most stupid trade out there. You cannot short it and if you buy it, you pay between 30-100% premium over the cash prices.

Means, when BTC collapses and loses 50%, you'll lose that plus the premium you paid, which most likely will blow up your account...but hey: at least it was a regulated blow up, right XD


Seriously, I know you've been weaseling around the last couple of days in order to find a way into the market, which is "safe".
I hate to tell you that there is no such way. The future is a hail mary experiment, there's no ETF or ETN with SEC approval, there's no FDIC insured "broker", there's nobody to hold your hand.

If you want a piece of the cake, you need to find a way to trade cash and mitigate counterparty risk (hint: you have plenty of options here)

If you don't want to do that, you have to wait untill the market is tamed, everybody needs documents and licenses...but by then, the party will be over
 
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ARGGH! very glad I am asking these questions. SOOOO.... if I am adamant about wanting to trade Crypto on a US exchange,,,, I gotta wait for Futures, Options or similar to be approved.
 
It's trading at a massive premium...I have been watching this for months...it was trading in the low hundreds when I found it but the risk in this is insane....I have tried to short it but for some reason even trying to short one share which I have tried doesn't work....don't know if it's my broker but couldn't get to short it....
 
MrMuppet said:
No, you can't. GBTC is NOT an ETF, it's an unregulated trust.

Thus it doesn't have a creation/redemption process with an approved counterparty->nobody to keep prices in line with the cash price.

GBTC is probably the most stupid trade out there. You cannot short it and if you buy it, you pay between 30-100% premium over the cash prices.

Means, when BTC collapses and loses 50%, you'll lose that plus the premium you paid, which most likely will blow up your account...but hey: at least it was a regulated blow up, right XD


Seriously, I know you've been weaseling around the last couple of days in order to find a way into the market, which is "safe".
I hate to tell you that there is no such way. The future is a hail mary experiment, there's no ETF or ETN with SEC approval, there's no FDIC insured "broker", there's nobody to hold your hand.

If you want a piece of the cake, you need to find a way to trade cash and mitigate counterparty risk (hint: you have plenty of options here)

If you don't want to do that, you have to wait untill the market is tamed, everybody needs documents and licenses...but by then, the party will be over
More...



Did you try shorting it?

I tried....didn't work...
 
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