Bitcoin Forum

OK....according to the article below (link) the following below really caught my attention.

https://www.investopedia.com/grayscale-trust-gbtc-is-key-to-bitcoin-price-jpmorgan-5093550

quote:

JPMorgan's strategists write that the inflows into GBTC "are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics." In other words, investor enthusiasm for GBTC shares is a determinant of Bitcoin's price trajectory, and other Bitcoin traders do not possess sufficient market share or Bitcoin holdings to influence a correction in the cryptocurrency’s price.

unquote.

OK...I get it, but one wonders how much they are gonna push this price pump of Bitcoin until that 'burp' and are FULL! Or hell, is GrayScale just 'ahead of the curve'

as they have been all year, and simply ahead of another FOMO/ATH run of other investment giants also waiting to cannonball into the Bitcoin pool?

So the question becomes, is this gonna be another run up to around $50K Bitcoin into 2021 as everyone piles in? Or is this simply the top now due to 'mainly'

ONE buyer of FOMO in mass: ie GrayScale Trust?

Well, what do you think, how far will GrayScale Trust go on all this, and/or will other investment giants jump in as well?

Consider taking the poll here.

Brad


 

$50K is nothing. Aim higher. ;)

Grayscale isn't one buyer per se. They keep privately placing GBTC shares because there is sustained institutional demand from other investors. Whether that institutional demand keeps up is an open question, but there certainly seems to be a lot of buzz right now.


The sky is the limit. Microstrategy, Ruffer LLP, One River.....this is just the beginning.

Once we get an ETF approval, Grayscale will become less relevant.

Yeah as exstasie said.

Grayscale is not one buyer they are a fund that many accredited investors use. This includes rich people, people in the finance industry, corporations, and investment firms. Grayscale is just the main vehicle on Wall St right now to get into Bitcoin. There will be others, others are already starting, but Grayscale is the primary one right now. Eventually an ETF will allow anybody used to investing through Wall St, not just accredited investors but your average person on the street, to buy Bitcoin through their normal Wall St avenues. In a few years Grayscale will just be one of many funds, including ETFs, that allow people who invest through Wall St to get into Bitcoin.



And yeah as exstasie said, $50k really is nothing. Accredited investors, institutional investors, are like back in 2011 right now compared to the retail investor market when it comes to Bitcoin. The amount of money this class of investor has is simply enormous compared to the main street money that has gone into Bitcoin between 2010 and 2017 to get the price up to $20k initially. By the time the price hits $50k, that just means the leading edge of the most forward thinking in the investment class will have only just gotten a decent position in Bitcoin.

Think what it'll be like when a thousand companies have each put hundreds of millions of dollars or even a billion or two into Bitcoin. Add to that dozens of investment funds putting $1-10 billion each into Bitcoin. Add to that main street investors picking up 30, 40, or even 50 billion dollars in Bitcoin through ETFs. Add to that the money from people actually buying Bitcoin itself, rather than through investment funds, but including 3rd party providers like Robinhood, Cash App, Paypal, expanding 5-10x from where it is now. Add to that maaaaybe even central banks moving some of their gold reserves to Bitcoin and putting say $50 billion total into Bitcoin. We're not talking about a trillion dollar market cap here ($50k price), we're talking about tens of trillions of dollars, so more like $1 million per Bitcoin. This isn't going to happen in a year, but by the end of this decade...definitely a possibility.

I don't really follow these things because they don't interest by but looking at the historical facts I see that this is nothing new, GrayScale for example was founded back in 2013 and has been offering their services for that long. I don't think why things have to be any different now just because there is a lot of hype in the media and their names keep being heard over and over.

But it should not be overlooked that Grayscale has never bought as much BTC as it does now, and from this post (https://bitcointalk.org/index.php?topic=5256529.msg55916246#msg55916246) from @fillippone in a little over a month they bought about 100 000 BTC. It is logical that the names of all these big companies are constantly running through the media, but mostly in those that are crypto or financially related - and unlike 2017 some mainstream media (at least my local ones) do not mention anything related to BTC at all.

I would say that FOMO is in a way very limited towards certain targets, in this case big players - because small ones usually have some other existential problems such as how to keep a job, repay a loan and not get infected with a virus. Buying via OTC, using the current situation to your advantage and controlling the media are a win-win situation for them.

I think Grayscale is only the tip of the iceberg.
I will try to put my hands on the original JP Morgan piece, to clarify the message a little bit, as I think the Investopedia reporter made a lot of confusion there (allow me a couple of days to do so).

The point is, as I said elsewhere (https://bitcointalk.org/index.php?topic=5303310.msg55936088#msg55936088), that the success of Grayscale and the choice of Microstrategy are a signal to other fund managers/treasurer/CFO: investing in Bitcoin has proved compatible with all the regulatory/accounting/fiscal/compliance requirements. Staying out of bitcoin is not something that can be granted as a de facto standard choice", but must be the result of a deliberate choice.

In case of the rally to continue for sure others will follow, with the snowballing effect we observed in the past.


Regard to Grayscale effect on the price, I also already said (https://bitcointalk.org/index.php?topic=5256529.msg55912622#msg55912622) I am not fully confident in having a big single point of failure, even more, if that point has surged to "sanity check" for the ecosystem: but competition will ultimately lead to more offering and more competitive pricing: the investors simply will shift their investment from GBTC to another vehicle.

Finally, if you want to check my finding on Grayscale, please check this thread:
Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! (https://bitcointalk.org/index.php?topic=5256529)

It has nothing to do with hype and the media.

Grayscale is a Bitcoin fund offered to accredited investors - basically rich people, people in the finance industry, and institutions. Before this year these types of people were not interested in Bitcoin and so Grayscale was a very minor player in the Bitcoin market. This year that has changed, and this Fall these types of investors have become the driving force on the buy side of the market, and so far this money has only the first few trickles of the dam that's breaking and will come flooding into Bitcoin in the years to come.

Why it's different is basically it completely changes the game. This year Bitcoin has gone from a speculative investment for risky retail investors, to the beginnings of it being a must-have asset to store wealth in for the class of investor that holds most of the wealth in the world.

An analogy: Bitcoin was a tiny but quickly growing pond off to the side of a beach, this year a stream has cut through the beach and started flowing into the pond, and pretty soon the pond will just be part of the ocean, expanding rapidly throughout it.

I believe that they are going to keep fomoing bitcoin as much as they can and as high as they can. However we do not know how much power and money do they have, can they actually make it so that they could make bitcoin over 100k with the money they have? Or will they stop at some point and not really take it any further?

Maybe at some point they will not have any money left and when people start selling their bitcoins these big companies can't afford to buy more, do not have the money to buy more and the price will fall and they will watch just like we watched. It is damn sure that they have bigger pockets than any of us, that is guaranteed, and they are richer than anyone who has ever bought bitcoin before, even if you invested and bought like 30-50 thousand bitcoins, those people did it when it was cheap, these guys are spending money more than anyone else, so I am very hopeful.

So, correct me if I am wrong....what GrayScale (and we hope others will do that are also investment trusts and will pile into Bitcoin/Crypto soon) is the following:

1) GrayScale Buys Bitcoin in mass quantities!

2) GrayScale then 'sells' Bitcoin through their Traditional Investment Trust branch/market ticket price of GBTC at around a 20% markup? (I think that is the figure?)

3) Investors pile into this via their 'brokered' and 'managed' retirement accounts, investment fund, whatever/whichever/more that they can do so legally, etc, etc. FOMO!

4) The price of GrayScale (GBTC) goes up also in value...above and 'delightfully' to GrayScale above the 20% markup they already have for 'overhead'...$$$ roll in!

5) They now have 'suddenly' another Billion dollars flushed out into GBTC that they turn around and buy even more BItcoin with! Rinse/Wash/Repeat as long as adoption holds.

So as long as there is 'demand' through this 'traditional' marketplace to get GBTC vs Bitcoin direct..they can play this game a long time. That is 'until' others

also, chime in and this kinda thing is more common and distributed more widespread...rather than GrayScale getting the majority of traditional $$$ with this method. Or any

so it seems, God knows what is going on that we can see for buy pressures right now!

Well, correct me above and/or add some 'tweaks' and maybe 'subtlety' to the above...but as a 'rough' framework..this is how this little pump machine is working

for GrayScale at this time. Sheesh! :)

Note the link below:

https://decrypt.co/resources/gbtc-everything-you-need-to-know-about-the-grayscale-bitcoin-trust

Also from the above link it states that GrayScale 'owns' 70% of all Bitcoin held publicaly by traded companies. 12/17/2020.

quote:

How much Bitcoin does GBTC own?
It trades under “GBTC.” The Grayscale Bitcoin Trust holds 546,544 Bitcoin, or 70% of the 775,137 Bitcoin held by publicly traded companies, according to Bitcointreasuries.org.
Dec 17, 2020

unquote.

So, there is a 'danger' here...in that, we need 'more' publicly traded companies to step up and along with GrayScale 'pump' and HODL like GrayScale does. If not, there

may come to a point in the risk/reward calculations amount to too much they will stall/take profits/or cut back in buys...at that point, others need to step up or

of course a 'probably' 30% correction downward in price.....as my guess. I assume..that others will FOMO and pile in but we will see!

Brad

As GrayScale is just first of many... it will be a huge bull run.

More and more business going FOMO. Let's hope that they will not pump it too much and too 'scary' for the rest of us.

Though I believe that the bull run is huge, you should forget that in this market, there aren't alone bulls but bears too and these bears need nothing but USDT to short it down with full power. Just think that when there's extreme optimism, it feels like we'll just touch sky high and then a sudden dump. You simply can't blame GrayScale for the same if the same value-occupied company or even of higher level just attacks BTC with too many short positions which sends it under $20k in no time (just like we saw in 2017). It's not necessary that if retail investors can't move it, other giant companies will just "buy" BTC. It'll be a big bang between these giants and we're set to see a big battle in near future, this is just the beginning.

Yeah, I should probably sell some Bitcoin, but I got my stuff at a 'low' (gasp) price...so pretty much any I sell will almost be completely done in by cap gains of at least 15% plus

my 10% state taxes or a 25% hit. Thus, the bet is ..should I sell now..keep cash for the Bitcoin price dip that will come 'eventually'? But on the other hand, the Bitcoin price would

have to dip below 25% of current market value (if I sold some now) before I'd simply just break even by HODL'ing. Thus the issue, I assume Bitcoin will do its usual thing, of dumping

like 30-35% and I will shout what I usually shout at the laptop. "Bitcoin, you merciless BITCH!" and toss something in the general area of the closet. (Hey, 'Tradition' is important!)

But again, where/when will Bitcoin break at? If I had to bet a basket of kittens lives on when the break would have happened it would have been about 19K Bitcoin! Shows, what

I know, I'd be knee-deep in dead kittens by now! :(

So, in that I NEVER, EVER in the 7 years I've been in Bitcoin, guessed correctly on selling on the expectation of a dip in BTC price, I will simply HODL and 'eat' the 'dip' when

it happens and Bitcoin always has, so far, blundered back and beyond the price I coulda/shoulda/woulda sold anyway...so this will copy the same pattern.

Just a skill I have at 'selling altcoins' back in the day mining for Bitcoin at the wrong time and buying 'dubious' ASIC miner equipment, etc. Hey, it's a skill!

Well, no more mining, no amount of any note of altcoins, so I have at least limited my 'danger' of selling on my 'supposed' hunch 'dip' to only break even on  Bitcoin I now

sold at the 25% tax loss anyway, neither my timing of such nor my lack of balls, along with my

track record of ALWAYS being wrong 7-9 times in the past, meh! I think I'll just HODL now, even if it does the usual 30-50% dump and sideways for a year. (Bitcoin really

likes sideways..goes down like an elevator and up like taking the stairs!) Bitcoin: Like collecting Cats, the more you have, the more excitement! :)

So it goes. We will see, but IMHO, this FOMO we see with GrayScale and others is mainly 'institutional money' if not just GrayScale proper...WTF is gonna happen when

FOMO hits in stride with the regular folk masses like at the previous ATH of 2017? Sheesh! Buckle up ButterCup.we may encounter a 'bit' of acceleration increase yet! :)

Bitcoin: Always Drama! (tm Bitcoin)

later

Brad

They buy, then issue GBTC backed with the BTC. That GBTC is issued to investors at NAV (~spot price), but investors can't sell it until the 6 month lockup period is over.


The premium sustains because of the lockup period and because GBTC shares can't be redeemed for the underlying. This is fundamentally bullish for Bitcoin because it basically means Grayscale's trust can only grow in size. It's sucking BTC supply off the market constantly.

Even though Grayscale doesn't profit from the premium, they profit immensely the more BTC that's locked up in the trust. They take a 2% management fee on everything they hold in custody.


Yep, basically.

I believe an ETF (with much lower carry cost than 2%) will eventually be approved. That will mark the end of Grayscale's golden age.

They have far more money than you are thinking, waaaaay more money. Honestly, moving the Bitcoin price up to $100k would be nothing for them. They will still barely be in the game by the time they've helped move it to $100k. If even a handful of the largest corporations and investment firms decided to put 1% of their money in Bitcoin in the next week and didn't care about slippage (moving the market with their buys), we'd have a $50k price by the end of the week. $100k could happen in a year, and it'll be a bunch more years until Bitcoin finds its way into a few percent of the portfolio of a majority of these institutions. This is not a $20k -> $100k rocketship, it's a $20k -> possibly $1 million rocketship over the next 5-10 years.

If you don't even think about Bitcoin as a payment platform, you don't even think about it as a way to bank oneself and help the unbanked billions of people in the world, you don't even think about it as a very popular investment among younger people, and so on, if all you think about it as is a better version of gold as a store of value (which it is), and say it is bound to be on par with gold, cutting gold's $10 trillion marketcap in half so Bitcoin and gold are each at $5 trillion, right there you have a $250k Bitcoin price, and we left out most of Bitcoin's upside as an payment system and investment asset in that calculation.

Yeah just earlier today I read about how Grayscale works. I didn't really understand it before. Didn't fully realize before today that it is a one-way thing, they are just buying Bitcoin and not selling, it's just shares in the trust that are sold on the market by investors after their lock-up period is over, and the shares track the bitcoin price moves (generally with a premium).

For sure once an ETF comes investors should move over to that, but Grayscale is by that time going to have millions of BTC! I guess though it is worth it to pay the premium for accredited investors because the premium tends to go up when the lock-out period or whatever ends, so they buy at a lower premium, and then sell on to the open market at a higher premium, thus they not only get the price appreciation of Bitcoin through the shares, but they get maybe an added percentage due to the premium gain if they sell when the premium is higher. Thus investors can make a percentage on top of whatever bitcoin appreciation is, and could then buy back into GBTC with the additional money from the premium in their recent sale, and do it all over again, just do that every 6 months I guess. I don't really get why there is such a premium on the shares once they are available on the open market though, unless retail investors are just that desperate to get their hands on Bitcoin price action but don't actually want to buy Bitcoin itself and would rather just get it through shares of GBTC.

Grayscale will likely be the single largest holders of Bitcoin at some point next year (I don't think anyone has more than Satoshi's ~1 million). Will be interesting what happens to all those Bitcoin eventually, especially if an ETF takes away a lot of their clients. If ETFs killed their business I suppose they could then just turn into a giant Bitcoin lending company, continuing to make a ton of money by lending out their millions of Bitcoin. They could end up being one of the largest investment firms in the world by the end of this decade just from the Bitcoin they will own. Very interesting.

Well, buying alone an asset is simply greed. That's because I've seen many cases where people tried to become the "big bull" of the markets and ended up getting their capital dwindled to such levels which lead them to either get under debts or go bankrupt. If this is happening and more institutions join hands with GrayScale and come up with the same strategy, I believe that BTC will be nothing but a centralized puppet of these huge players who've got almost everything in their favor (even Banks are in their favor) and will go out of reach for the lower and middle class.

Yeah, that is a danger..and with Bitcoin/Crypto. As to myself, I've managed to 'refrain' from such an idea at least with buying Bitcoin/Crypto ..er mining ..back in the day. The greed

and FOMO was high...but I got out of that at the right time kinda/sorta. But to your point, even from my 2013 newbie days, I've always thought of Bitcoin in particular as

'virtual land'. In other words, where the internet had NO $$$ in the backbone of the Internet....all the $$$ were on the internet apps like Yahoo and Facebook, etc. As far as Bitcoin

the network or blockchain, for the most part, reflect Bitcoin price via applications and adoption. Indeed, that is what we are seeing here. Where greed comes into play is

do I HODL for more adoption or more price or will this just fade? So with this in mind, you have to think of Bitcoin as a virtual land much like you did if you had a farm or ranch

you want to pass on to your kids/or whomever. Does it have a use? Does it have an adoption or can you build on the land (in this case bitcoin) applications?

This means, like real land you need to HODL at 'least' 5-10 years and if you yank it at 5 years it has to be for real-life-issues or medical...just like selling the family farm.

This is the only way to tap down the greed reflex. The people that sell and buy on the dips....shudder...I don't have those skills....so I just HODL.

So far, since 2013 this has been the 'smartest' yet hardest thing I've ever done. Now I can afford retirement w/o BTC/Crypto..indeed it could all go, beanie-baby and poof

in price..and my lifestyle would not change much, if any. I myself intend to just pass the BTC/Crypto down the line with a will....just like ranch to relatives.

So, if you think, long-term like a real-time farmer rancher and not like a 'land speculator' or quick money con...and can handle the 30-35% and occasional

75% dumps and pumps in BTC/Crypto prices and HODL 5-10 years...so far, or at least since 2013 when I got into this...it is a wise play indeed!

Again, this is long term and if you 'believe' that BTC/Crypto has real-world use and adoption...well, you will be fine. I always look at this in 3 ways, in my case since 2013 , in my dubious

little mind will be fine. This is with my 3-step 'dubious' mine exercise: 1) BTC goes to whatever it is now to 1/2 of the price it is now and adoption/niche

has been met and now it acts like a traditional investment as such...with 1-2% or more growth per year. or 2) btc price whatever it is now...more or less that is what it is...no change

and again, adoption/niche met..from now on acts like a traditional investment and goes up 1-2% a year from this point on or 3) BTC price at whatever it is at the time you are thinking this

goes up 3x/8x/16x/20x as it has in the past etc...just like it has in the past because as 'virtual land' 18.5 million BTC being held by 'someone' and adoption has not matured yet

with only 3.5 million Biitcoin left and it does the whole 'let's go crazy' in the adoption phase it has in the past.

Currently with money printing and bonds due to the money printing (the traditional way

to at least get a bunch of bonds if the stock market craps out to beat inflation...with current money printing doubtful IMHO any bond will beat inflation in next 5-7-10 years....the

likelihood of 3) being the path to stay on...as has been since 2013 is how I'm going. Again, if farmers and ranchers with the same kind of land pump/dump in prices going

up and down would lose their minds thinking about how much money they 'could have' or 'would have' etc. Best just to think like a farmer....HODL coin like you have ranch land

at the edge of Las Vegas in the 1960s..if you can 'add' to it fine..HODL is 'obvoius!' .But don't count on long term over 5-10 years the prices are gonna go down long term...or why are you

ranching? or farming? The same thing works with Bitcoin. Also only play this game on what you can afford to lose...it is not 'investing' this is speculation. Again, easy for me to say...

but buy some dust..sell some stuff (man I shoulda/coulda done that in 2013 to eBay..the BTC I'd have now!) :(  Dump all that stuff in the attic you may die with...sell it...clean

it out...get BTC dust..whatcha gonna do if BTC goes stupid up again due to adoption/inflation/dubious other countries currencies/etc? What if Amazon starts taking BTC/Crypto

worldwide and starts offering banking/debit/then checking/savings/crypto-exchange options to the world's 'unbanked' etc? If 'all' value comes from legal ownership of

land for loans and collateral for such banking/checking...why can't they use such BTC/Crypto on a say BTC/crypto debit card to give themselves a step up in that manner?

Why should they deal with a country where hiding gold under your hut for the next revolution or coup is normal? or corrupt banking..or 1,200 percent inflation like in

Venezuela..so I HODL ...I don't think we've seen anything yet ..but again...this is over a 5-10 year stretch ....under that time frame I expect BTC/Crypto prices and FUD

and Regulations and all the other stuff BTC/crypto will have to slog through...but then again, I"m going by the motto of ' only what you can afford' and that BTC Dust you

get now from 'attic mining' stuff to sell on eBay..may be a really, really big deal in 5-10 years at 'hopefully' 100k BTC or more!

and hell, is stuff to do (silly hobby) :)

As to your 'centralized' puppet quote above, maybe...but damn hard to be a puppet if Bitcoin 'stays' decentralized as far as 21 million BTC cap on Bitcoin...that's the kicker

miners may come and go/centralization like through exchanges and regulations may also arrive but assuming my 'dubious' its 'virtual  land' holds with this ...the staus quo

affect of decentralized 'at the core of it' Bitcoin will be hard to move in that decentralization of money, not in lock-step with currency manipulation like fiat dollars..well..it will

muddle along fine..even with the 1 to 1 inflationary $1 to 1 Token National currencies coming along.

But again, all this is 'speculation' so don't play if you can't take the pain! :)

Brad

Brad


Brad

Again, I don't see it. Back in 2017 the hype was similar to today. The same Grayscale company was getting hyped up back then too. They even reported to have about 200k bitcoin (they currently have 570k). So people were interested in their centralized services back then too.
Obviously it has grown, the same way bitcoin adoption has been growing over the past 3 years! But that doesn't mean these companies are bigger players now compared to before just because their names are being heard in the media a lot more or they have accumulated more bitcoin over the past couple of years. The market itself has grown A LOT.

Again, it's got nothing to do with hype or names in the media. Having heard of Grayscale in 2017 doesn't mean nothing has changed. It's got to do with institutional investor buys of bitcoin exploding.

The last time Bitcoin was at $20k Grayscale owned about 175k btc, and institutional investors weren't interesting during the intervening years because even two years later by the beginning of this year they'd only added about 90k btc to their holdings in two years. Now they are at about 600k, so they added about 340k btc this year. They bought a good amount more Bitcoin this year than their first 6 years combined. It's not hype. Institutional investors are becoming much larger players in bitcoin than they ever have been before this year, even before just a few months ago. The dynamic of the market is changing. For the first time institutional investors (the people or groups of people with the majority of the money in the world) are starting to flock to bitcoin - that is something that is brand new.

Since the 2017 peak to right this moment, Bitcoin's market cap has rise about 60%, meanwhile the number of Bitcoin Grayscale owns has risen about 240% and their market cap has risen about 370%. Obviously it is not just growing with the overall market. Institutional and accredited investors are eating up the Bitcoin market right now. This has never been the case before. Hundreds of millions of dollars of Bitcoin are being bought by institutional investors through Grayscale alone on a weekly basis now. This ENTIRELY changes the game, and it is why the price has shot from $10k to $27k this Fall. And yet only the tiniest fraction of the money they have has so far been allocated.

My opinion is I won't agree that grayscale and institutional investors are actually having a FOMO on Bitcoin. That's a big NO for me.

In finance, profit is almost the least option. The only reason why you're getting into somewhere is to sustain, hedge in long term.

Bitcoin is actually one of the options they choose and that is basically it. Grayscale has been there for quite some time now, so FOMO is not a thing. It's just that, the number of people who got interested in bitcoin is increasing, so are their names.

Yeah I would agree. I wouldn't call this FOMO. It's just that now finally institutional investors are realizing they should be buying bitcoin, so they are doing exactly that. We are still at the very beginning of this, but just in the past few months they have come into the market in a much more substantial manner than ever before. This will continue for years, not because of FOMO, but because they are making long term investments to hold a little bit of their portfolio in Bitcoin. As you say, they are getting in "to sustain, hedge in long term".

and I doubly agree!
This is a long term venture by people and companies into Bitcoin. They are
liquidating their FIAT assets into Bitcoin because its a safe haven.

There are a few drivers at play now, a big one is COVID and how governments
are reacting to it, I.E fiscal stimulus packages which leads to the weakening of a currency.

The second consideration is the halving, supply has been halved and all of a sudden
the demand has massively increased.

IMO the third driver is the willingness for traditional investors like Grayscale
and Microstrategies to come out and remove the stigma and untruths connected to BTC

Bitcoins stock to flow model shows if we can follow it a rise to and over $100k this year.

In these times for investors looking to secure their assets there is no other place
to move them other than Bitcoin. All other traditional safe havens are losing their value.

To show how relevant Grayscale (and by proxy, institutional investors) are starting to become in Bitcoin, in the past 3 years Grayscale has bought about 24% of all the newly mined bitcoin during that time. This is just a single bitcoin investment fund, and the vast majority (about 80%) of that buying by Grayscale the past 3 years was done this year.

Grayscale alone is now buying far in excess of how much Bitcoin is being mined, meaning, they and other institutional investors just now starting to get into Bitcoin are going to be eating up the supply of anyone else selling: retail investors, the old breed of whales, etc. And they are gonna be eating it up fast. In the next couple years we should expect several million bitcoin to be sitting the wallets of corporations and investment firms not even counting Grayscale, with Grayscale alone going over 1 million Bitcoin at some point next year and likely hitting 2 million in the next few years.

I mean hell, a single company, that's only worth $3 billion now, and was only worth $1 billion when it started buying Bitcoin this summer, now owns 70,000 BTC by itself! Granted, that is the one example of an institutional investors actually FOMOing in, but since they did it early its FOMO in a positive way where it's just a great investment with essentially zero risk.

It's only one fund, but let's be clear: all the other funds are tiny. Coinshares and 3iQ are an order of magnitude smaller, and the European ETPs are almost a joke by comparison. Grayscale is the primary place where institutional investors have been taking their positions.


I think Grayscale is going to peak and become less relevant in the next couple years. Once an ETF and other cheaper regulated options emerge in major equities markets (Grayscale charges an obscene 2% annual management fee and is listed in the pink sheet OTC markets), institutions will be heading elsewhere. Then they are going to arbitrage that GBTC premium towards 0% (and possibly even into the negatives), forcing Grayscale to reopen their share redemption program just to keep the market pegged to spot. Then GBTC will quietly be drained down in size.

All the empty ETF hype the last few years has everyone exhausted so no one cares about it anymore, but when one finally gets approved it's going to be a major game changer.

Yup absolutely it's the main fund. Still very impressive (though does Bitgo custody for big clients? Cuz I just read they have $16 billion of crypto as well which is the same size as Grayscale, though maybe that's different because they are just custodying for clients, sort of like other platforms aimed at institutional players - like Coinbase I'm pretty sure has somewhere around that as well). I expect in the next few years we will see funds come to existence that also pick up hundreds of thousand of btc each. By the time there are better options on the table though GBTC might have close to 10% of all the bitcoin in existence up to that point!

Yeah agreed an ETF should make GBTC obsolete, and an ETF would be open to everyone equally so I would assume it would eventually grow to be larger than GBTC. ETF is when you get normal people throwing a couple percent of their retirement portfolio into Bitcoin.

But just the fact that Grayscale alone has taken 24% of the mined supply the past 3 years, and most of that has been probably in the past 6 months, is crazy. And I'm pretty sure the actual big 9 digit institutional buys we've been hearing about lately from companies and investment funds are actually buying Bitcoin for themselves through other platforms, like Coinbase's institutional services, and not Grayscale shares. So Grayscale is only one piece of the institutional buys, and yet it is buying massive amounts. All I can say is the future is looking very bright for anyone who owns Bitcoin!

The pressure to have an ETF is too big, as the premium in the Grayscale secondary market shows and the buying pressure on Microstrategy following their BTC investment, that made them an irritual, unregulated Bitcoin ETF.
SEC will have to eventually concede an authorisation to avoid major damages of people wanting to get long Bitcoin getting long sub-regulated vehicles, or dangerous Bitcoin proxies (Paypal CFD, for examples).

When an ETF will get approved in the US (in Europe we have something very similar, BTCE) Grayscale will see massive outflows in that new vehicle. Hopefully it will be not relevant for the underlying.

....why do you say "CFD"? paypal isn't running a CFD market. that would be illegal in the USA. having obtained a bitlicense (which requires 100% reserves) and using a NY licensed trust company (paxos) for custody, they actually appear to be more tightly regulated than any american exchange on the market.


i reckon it'll hurt GBTC holders, who will see that giant premium disappear, but i don't see why it should have a major effect on the rest of the market.

an ETF approval on the other hand---that might generate some hype, and with hype comes higher prices. :)

Are they actually buying real Bitcoin, by the way? As in, they are owning and controlling the actual private keys to this BTC? Because if so,,, then yes it is truly relevant and people can even trace the BTC (I guess?). But if not,,, it is as relevant as all those exchanges that trade derivatives with cash settlement, right? As in, no effect;)

I use the expression CFD because , even if those aren't technically CFD, and maybe as per BitLicence are 100% backed by real bitcoins, for the users are actually CFD: you can only hodl them and sell for the difference. You cannot spend them, you cannot transfer them, you cannot do anything. You also have a credit risk toward PayPal. Thus, are more similar to a CFD than a real Bitcoin, in my opinion.



I am just being overcautious here.
An ETF approval would generate a massive outflow from Grayscale (i.e. selling pressure) to switch to the ETF.
My guess is that this selling pressure would be more than offset by the buying pressure on the ETF from those who switched, and presumably would operate on a contextual way, and the general public buying the ETF like there's no tomorrow.

Hey, I managed to put my greasy hands on that report: you can read the relevant part here:
Wall Street Reports On Bitcoin: JP Morgan Flows & Liquidity (https://bitcointalk.org/index.php?topic=5304479.msg55958298#msg55958298)

A very interesting read indeed. And overall a nice 540° turn for JPM

More will invest. Norway purchased 2 usd worth of  for every citizen about 2 x 5 mill = 10 mill.

European Union is 450 mill people. a simple 0.5-1.0 % rise in vat sunk into btc for all 450 million is not the stupidest idea in the world.

That would mean a true to the moon move of epic size.

Here is an old document
http://stics.mruni.eu/wp-content/uploads/2013/06/209-222.pdf

vat in the whole union is huge so if combined vat is moved up just a bit to invest in a European Union hedge fund. BTC could go nuts maybe even as far as Saturn fuck the moon or mars.

Yep, Bitgo does custody. I think they are the second biggest in the industry, behind Coinbase, who handles custody for Grayscale.


I guess a lot depends on timing. I have a feeling an ETF approval will come sooner than you think, given how quickly the regulatory landscape is changing and the level of institutional interest.

As a contrarian, I also look around and see how nobody cares about or expects an ETF anymore, and wonder if that means it's actually close this time. (As opposed to 2017-2018, when everyone was on the edge of their seats waiting)


Not just that but institutions. ETFs are one of the major ways large institutions access markets these days, as opposed to taking physical custody of assets.

hmmm, ok. when you said CFD the first thing that popped into my head was "liquidity problems" because the point of CFDs is to offer access to high leverage exposure to the underlying asset in a segregated (low liquidity) market. paypal should not have any such liquidity problems if they are fully backed and source their coins from the spot and OTC markets.

you were saying the SEC would be forced to acquiesce on an ETF because such instruments are dangerous, but what makes an ETF fundamentally more safe? just because it would have SEC oversight rather than NYDFS oversight?


but it would only be selling pressure on GBTC, not the spot market. just like there is huge buying pressure now and that has created a big premium, huge selling pressure would destroy that premium, or even create a discount.

I don't think that the Bitcoin bull market is caused by Grayscale only.Perhaps there are other big players(institutional investors and crypto whales),who are staying in the shadows and buying BTC,while Grayscale stays in the spotlights and gets all the attention from the mainstream media.
The Bitcoin price went from 19K to 28K USD in one week,which isn't sustainable growth,if you ask me.
This is a price bubble,caused by FOMO and this bubble will burst sooner or later.I don't know who or what caused that bubble,Grayscale is only one of many factors.

I just made a sum of Grayscale quarter on my Thread. You can read it here:

Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! (https://bitcointalk.org/index.php?topic=5256529.msg55994713#msg55994713)


Regarding your opinion of BTC price as a bubble, I kindly disagree: How can something be defined a bubble if it is only the 106% of the model that has been forecasting the BTC price with a 95% r^2?

Fillippone and I were speculating about this:


I've been keeping an eye on outstanding shares, and inflows do appear to have completely stopped as of 12/24.

At this point I'm inclined to say all investors, old and new, are cut off. I suppose that's a temporarily bearish factor for the market, but it doesn't seem to matter. Onto $30K it is......

Ah yeah ok. I deleted my post that you quoted once I went over to the other Grayscale thread and saw that chart that showed investments stopped after Christmas Eve. I guess the articles I saw a week before that meant the trust was about to stop investments but didn't make that clear.

I think when this happened in June they closed down investments for a few weeks, so I'd guess they will open it back up late January perhaps.

But yeah certainly impressive that in the week since Grayscale stopped investing the price went from $24k to $29.9k as of right now!

If there is going to be a correction in price soon I would expect it this month. Once Grayscale opens back up in a few weeks it's gonna be real hard to get anything other than quick bear traps when they are adding hundreds of millions of dollars of Bitcoin every single week!

I have always said the same thing, grayscale buying bitcoin does help increase the price a bit, but the real fact is that people are bullish on bitcoin and instead of the direct result of grayscale buying, the "news" of grayscale buying impacts the market a lot more if you ask me.

It is normal for financial companies to not make big moves on holiday break, from around 24th or so to few days into new years they usually do not make big moves, because its holiday time and they probably want to have fun too :D but at the end they will get back and considering we have increased even when they were gone, when they come back and make tens of even hundreds of millions of dollars worth moves, we are probably going to skyrocket even higher, I am expecting about 50k per bitcoin until this spring (or April latest) because they put a lot of money in, and we put a lot of money in because of what they do as well so its double dipping.

I think yesterday, after the $30K wall was breached there was about $1,500,000,000. Yes thats the right amount of zeros. $1.5Billion worth of outflows from Coinbase. It looks like some kind of OTC custody buys which are sent to cold storage.

I am assuming this is not Grayscale however you never know. Seems like some huge fund decided to invest over a billion dollars worth. I am sure some time this week we will find out who it was when they decide to anounce it publicity on CNBC.

Either way, seems BTC is going through a supply side liquidity crisis, looking at order book depth, there is very little offers on the ask side.

I think this is the key factor of what we are seing.

I don't remember exactly now, but someone responded to a comment of mine about FOMO in another thread that FOMO is a psychological concept and that institutional investors are guided by rational arguments, rather than by emotions, which would be more typical of the masses.

But perhaps we may be witnessing an institutional FOMO based on rational arguments if the institutions foresee an increase in demand. Institutional demand today is already eating up all bitcoins newly mined. So, perhaps it is better to buy now than to buy more expensive later.

Yeah it's kinda of like a double pump phenomenon. They buy and lock up a TON of supply which makes the price go higher, and then every time news comes out about how much Grayscale bought, just that knowledge causes other investors to be like oh crap supply is getting eaten up I gotta buy in more before the price shoots up. Both of those things absolutely send the price upwards.

Well Coinbase has an institutional service as well, I believe called Coinbase Prime. Microstrategy bought their 70k BTC through Coinbase Prime. I don't know how Grayscale does their buys but they aren't even buying right now so it definitely wasn't them. It must've just been some big institutional client(s) of Coinbase's. Goes to show that as much as Grayscale is publicly showing the institutional demand for Bitcoin each week with their investment reports, there's a lot more institutional demand coming in besides just Grayscale. And the institutional flood is still only just starting, right now it's only the most forward thinking 1% of institutions starting to nibble on Bitcoin.

These are companies that do not have any rush like we do, when regular people end up buying bitcoin they usually just do that to get rich quick and they invest that into alts, defis and many other things or they just hope that bitcoin makes them super rich and when it doesn't they end up selling it.

So, what I think will happen is that these type of companies will get more and more bitcoins because regular people keep on selling bitcoin, they trade it at best (meaning they do sell but buy back and keep on doing this over and over again) which means there will always be more bitcoins on the market to buy for these big companies. This is exactly why I think it is quite obvious that these companies will take us to moon, since they only buy and never sell that means they are going to keep making bitcoin more and more valuable over time without a doubt.

I agree about the big companies - most likely they are resting now and they are not on the market. What confuses me in the current growth cycle is the number of transactions - it used to grow at each stage of the excitement and it was very expensive to conduct any transaction, now nothing of the kind is observed.

I also think that Grayscale doesn't really have that much money to invest into bitcoin all at once, they have invested nearly that much money for the past 1 year, to do as much of it in just one day would be a suicidal decision by them.

Plus they are on a great trajectory to make so much money as of right now with the amount of bitcoin they have, they do not need to put anything at risk, they have doubled their billion dollars in 2020, isn't that sort of enough?

If they get involved at this place it is going to get harder and harder, and with a drop they could be in a huge whole if they bought here, but if they stay away, they could still profit even after a fall. It could be anyone but I think anyone who has spent 1.5 billion dollars on 30k or more right now must be thinking too much further ahead, and not anytime soon, since we can't really double that quickly anymore.

That's another statistic of how we know this rally so far is fueled by institutions and not a massive retail investor frenzy - no massive number of transactions trying to get into blocks and tx fees staying in the high single digits (still high but not a massive frenzy high). It shouldn't confuse you, the price is going up because giant institutional entities are buying up massive amounts of BTC, which means for all this bought up Bitcoin there are only a few tx's needed to move them around, which is very different than millions of small investors picking up bitcoin all at once and trying to move it around. We'll know when the next retail investor craze starts when tx fees start skyrocketing and remain up there. For now it's just institutions eating up all the supply before the next retail frenzy has even begun.

Grayscale doesn't work like that though. Investors give them money to buy Bitcoin, and in return Grayscale gives them shares worth that amount of Bitcoin. Grayscale just buys based on how much investors give them each day. The last three days of their 6 month investment period (dec 22,23,24) they bought up about 30k BTC combined, which is a massive amount (over $700 million) because no doubt investors were trying to get in just before Grayscale's 6 month investment period ended before they closed up for a few weeks - every 6 months they stop taking investments and close up for a few weeks, the 6 month period is a lockout period in which investors can't sell the shares they bought up during that time, but once the lockout period ends investors can sell the shares on the open market, and for whatever reason Grayscale shuts down investments for a few weeks at the end of each lockout period.

They aren't a managed fund that decides what investment moves to make on behalf of their investors and they aren't a corporation that is investing their cash into Bitcoin, they just buy BTC whenever their investors give them money to do so, which they then own and hold while giving shares pegged to the BTC price to their investors who can later sell them on the open market. And the way they make money is on the fees and premium they charge, meanwhile they own an enormous amount of Bitcoin to which their shares are pegged. Drops in price don't directly affect Grayscale at all, they just make money off the fees they charge their investors.

But yeah for sure these institutions that are buying up so much BTC, like that $1.5 billion that exited Coinbase the other day, are buying for the long term.

Exactly, Grayscale is doing passive tracking investments on behalf of their clients. And do so for a hefty 2% fee.
@sana54210, if you want to know every detail on the mechanism of Grayscale, I might suggest you read this thread of mine.

Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! (https://bitcointalk.org/index.php?topic=5256529)

Please, feel free to ask any question in case you still have any concern.