GBTC Premium Down 10%: Will Bitcoin Drop in Price or is ETF Hype Rising Again?

[oksgvardukraine2018]

GBTC Premium Down 10%: Will Bitcoin Drop in Price or is ETF Hype Rising Again?
The premium on Bitcoin Investment Trust (GBTC), a publicly tradable Bitcoin instrument operated by Grayscale Investment, a $2 billion cryptocurrency fund and subsidiary of Digital Currency Group (DCG), has dropped by 10 percent in the past week.

Tyler Jenks, the president of Lucid Investment, who operated as an analyst in the traditional finance sector for over 4 decades, stated that the decline in the premium on GBTC is attributable to two major factors: a potential drop in the price of Bitcoin or a shift in interest from GBTC to exchange-traded funds (ETFs).

“GBTC premium down to below 10%. In the past, this would be a screaming buy. Not this time. Either Bitcoin is about to go much lower, AND/OR, Big money is betting on a new Bitcoin ETF,” Jenks said.

Why GBTC Premium is Relevant
Since its launch in 2016, GBTC has consistently seen substantial premium rates on its share price that represents 0.1 percent of the price of BTC. Currently, in OTC Markets, GBTC is being traded at $7.73, which means that investors in the traditional finance sector are trading BTC at a price of around $7,730.

Investors purchase Bitcoin from the Bitcoin Investment Trust and Grayscale with a substantial premium because it remains as the closest publicly tradable instrument to an ETF.

“Bitcoin Investment Trust is a traditional investment vehicle with shares titled in the investors name, providing a familiar structure for financial and tax advisors and easy transferability to beneficiaries under estate laws,” the Grayscale team explains.

GBTC is supported by a network of trusted service providers and Bitcoin owned by the fund are stored in the vaults of Xapo, to ensure the safety of customer funds.
https://www.ccn.com/gbtc-premium-down-10-will-bitcoin-drop-in-price-or-is-etf-hype-rising-again/

[avikz]

The shift of interest is most unlikely. After recent denials by SEC in two separate instances have pulled out many confidence plugs from that sector. Unless there is a hope for Winklevoss ETF to be approved by SEC, I don't see a reason for shift of interest. This ETF has already been rejected twice and it is now under consideration for the third time.

I would rather link the incident of premium price decrease with the current stable market price of bitcoin. The market price of bitcoin is showing signs of stability around 6.5k since some time now. That may have caused the premium price for GBTC to come down just to cover the gap because bull market run may not be imminent. I don't see a bearish market anytime soon, but we also need to keep in mind that anything and everything can happen in crypto market.

[figmentofmyass]

The premium on Bitcoin Investment Trust (GBTC), a publicly tradable Bitcoin instrument operated by Grayscale Investment, a $2 billion cryptocurrency fund and subsidiary of Digital Currency Group (DCG), has dropped by 10 percent in the past week.

but is it enough? GBTC had an obscene premium, but it's still trading at a 13-14% premium to the rest of the market right now. and that's for the privilege of paying a 2% management fee to grayscale!

good to see whales getting shaken out of the market though. that's what you want to see before betting on a bull run.

“GBTC premium down to below 10%. In the past, this would be a screaming buy. Not this time. Either Bitcoin is about to go much lower, AND/OR, Big money is betting on a new Bitcoin ETF,” Jenks said.

i think he's wrong. the high premium was a sign of the exuberant state of the market. this is just a sign of a healthy correction.

[pooya87]

that is not something that most people around here even heard of. not to mention that bitcoin price is determined on exchanges not off of it. if off the market events could affect the bitcoin price then it would have been worth a lot more than what it is right now.

as for ETF, the hype has  died off. there are still people who are hyped up from it but in the end the news has lost all of its effects. whether they postpone it or reject it has no effects. at this point the only thing that can change things is if they do something different and that is to approve ETF which is most probably not going to happen!

[davis196]

that is not something that most people around here even heard of. not to mention that bitcoin price is determined on exchanges not off of it. if off the market events could affect the bitcoin price then it would have been worth a lot more than what it is right now.

as for ETF, the hype has  died off. there are still people who are hyped up from it but in the end the news has lost all of its effects. whether they postpone it or reject it has no effects. at this point the only thing that can change things is if they do something different and that is to approve ETF which is most probably not going to happen!

I have never heard about this GBTC type of investment fund and I'm sure that most of the people haven't heard about it.It's just a 2 billion USD cryptocurrency fund,so I don't think that it has the power to influence the crypto markets.The current bitcoin price isn't going anywhere,so it's totally wrong to make predictions about it,based on some shitty "premium" investment fund.

[1Referee]

good to see whales getting shaken out of the market though. that's what you want to see before betting on a bull run.

Are they really shaken out? In most cases they only adjust their positions to lower levels without harming too much of their previous positions. When markets are as thin as they are here, the collateral damage is pretty much negligible.

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The thing with premiums is that during a market that's very calm and lacking volatility, don't stand a chance to maintain themselves because the volumes aren't there. People think the bear market just affects the price, but it goes much further than that, the entire ecosystem has to deal with the negative consequences, and that while this ecosystem largely thrives on hype and upwards momentum.

Good thing is that bear markets in crypto don't last years, and I'm pretty certain that the bottom is in already, or about to kick in before the end of Q1 2019.