#Bitcoin #Ethereum #GBTC #BTC #ETHE #ETH #BitcoinETF #Grayscale
What’s up with Grayscale?
BTC vs GBTC || ETH vs ETHE?

Grayscale Premiums GBTC worth it?


The opinions expressed in the video are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry.

GBTC is the largest and most popular crypto option for accessing Bitcoin.
The Grayscale Bitcoin Trust (GBTC), is a closed-end fund holding Bitcoin in “cold storage,” or offline
No redemption mechanism


What is GBTC

A closed-end fund has a fixed number of shares offered by an investment company through a private offering - no redeeming or creation of shares
Open-end funds (eg mutual fund) are offered through a fund company that sells shares directly to investors
A closed-end fund functions much more like an exchange-traded fund (ETF) than a mutual fund


Open End & Closed End Funds Differences

Bitcoin ETFs are exchange-traded funds that track the value of Bitcoin and trade on traditional market exchanges rather than cryptocurrency exchanges
They allow investors to invest in bitcoin without having to go through the hassle of using a cryptocurrency exchange while providing leverage to its price
They have no premium
They have very low management fees 1% to 0.75% and The CI Galaxy Bitcoin ETF (BTCX), which came to market in early March, charges an even lower 0.40%



ETFs

Fraud
They get hacked or lose their coins
The 2% management fee
It only trades during market hours
Counter-party risk ie you do not control your bitcoin
You cannot download your bitcoin
Can trade at a high premium eg 40% in Dec 2020


GBTC Risks

2% fee is pro-rated on a daily basis
Easy on-ramp
Available in retirement accounts
Available to people with regular brokerage accounts who cannot get access to crypto exchanges
Currently trades at a serious discount


GBTC Advantages

40% premium in December
19% discount now



Current GBTC Premium

Last 90 days - the BTC stagnancy
Bitcoin down 4%
GBTC down 22%
There’s your 18%



GBTC Premium - Closer Look

Bitcoin price skyrocketing
Money poured in to buy Bitcoin
Zero selling
Demand exceeds supply



Why The Premium in Dec?

No redemption capability
People are accessing different on-ramps eg Paypal, Kraken, Coinbase, etc
Different funds are now available eg skybridge
Canadian and Brazilian ETFs with far lower fees
Supply exceeds demand
Bitcoin Price has been flat for 3 months



Why Is It So Discounted Now?



The GBTC Competition

Grayscale Premiums


But it Goes Beyond Bitcoin
TICKER
PREMIUM
Cost
$GBTC: BTC
-18.14%
$39.28
$ETHE: ETH
-8.72%
$38.80
$GDLC: Large Cap
4.43%
$39.00
$ETCG: Eth Classic
-42.85%
$53.56
$LTCN: Litecoin
1172.62%
$394.45
$BCHG: BCH
166.14%
$33.10



What will Happen to GBTC?
Lifecycle of a Grayscale product:
1
2
3
4

To own 1 BTC worth you need to buy 1060 GBTC shares
Costing you $41806
Saving you $8,225


The Math Today
BTC PRICE
GBTC
BTC per GBTC
GBTC Premium over BTC
$50,031.100
$39.43
0.000943172
-19.68%
To own 1 Bitcoin w GBTC
1060.252001
$41,806
Savings
$8,225


It will convert to an ETF
Problem is we do not know when - probably autumn winter 2021
Still a great on ramp with 20% discount
Especially for those who want to sell at top of Bull Market - take profits and then buy BTC proper
Once converts to ETF - 2% fee will go away and of course the Discount to NAV will also disappear
GBTC has to be granted an ETF first as they hold 5% of all BTC with $32.7bn or 654,885 BTC


Conclusion


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