$GBTC Speculation, Information, and Cogitation

[Chainsaw]

Intended for speculation, analysis and discussion specific to the $GBTC investment vehicle or its price activity.
If you're obsessively refreshing the $GBTC quote page or trade history, share your neuroses here :-)

Listing current OTC Bids, Asks, Price: http://www.otcmarkets.com/stock/GBTC/quote
Orders < 100 shares not guaranteed to appear.

More detailed order history:
http://quotes.freerealtime.com/dl/frt/M?IM=quotes&type=Time%26Sales&SA=quotes&symbol=GBTC&qm_page=93229

Courtesy of phoenix1, "best so far for charts and NAV of GBTC":
http://tradeblock.com/markets/igsc/xbt-usd/1h/

[Chainsaw]

GBTC shares have a close relationship with the BIT Investment.
The relationship between bitcoin markets and the way the BIT Investment functions provide a novel interaction.
If you'd like to understand or follow the BIT Investment more closely, here is some more information and links. Thank you, Sitarow, for collecting this up.

An example of why a broader understanding may be helpful.
If we observe the BIT make large-volume purchases of bitcoins in the coming days (5/10/15), we will have indication that BIT Sellers today are likely reinvesting their profits.

Without further ado, the summary:

What is the

 

http://www.bitcointrust.co/
 

BIT INVESTMENT DETAILS

INVESTMENT MINIMUM:

$25,000
INVESTOR QUALIFICATION:

Accredited investor
ANNUAL ADMINISTRATIVE AND SAFEKEEPING FEE:

2.0%

Fact Sheet
http://bitcointrust.wpengine.netdna-cdn.com/wp-content/uploads/2015/03/Fact-Sheet_Mar15.pdf

Bitcointalk BIT information and discussion can be found here.
https://bitcointalk.org/index.php?topic=337486.0

P.S. Read the DISCLAIMERS:

This product represents a speculative investment and involves a high degree of risk. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment. Any offering or solicitation will be made only to qualified accredited investors pursuant to a formal offering with additional documentation, all of which should be read in their entirety. Information provided about the Bitcoin Investment Trust (the “BIT”) is not intended to be, nor should it be construed or used as investment, tax or legal advice, a recommendation, or an offer to sell, or a solicitation of an offer to buy, an interest in the BIT. Any offer or solicitation of an investment in the BIT may be made only by delivery of the BIT’s confidential offering documents to qualified accredited investors. You should rely solely on such offering documents in making any investment decision. An investment in the BIT is not suitable for all investors. The BIT is a private, unregistered investment vehicle and NOT subject to the same regulatory requirements as exchange traded funds or mutual funds, including the requirement to provide certain periodic and standardized pricing and valuation information to investors. There are substantial risks in investing in the BIT. You should note carefully the following:

The BIT represents a speculative investment and involves a high degree of risk. An investor could lose all or a substantial portion of his/her investment. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment in the BIT.

An investment in the BIT should be discretionary capital set aside strictly for speculative purposes.
An investment in the BIT is not suitable or desirable for all investors. Only qualified accredited investors may invest in the BIT.
The BIT’s offering documents have not been reviewed or approved by federal or state regulators.
An investment in the BIT will be illiquid and there may be significant restrictions on transferring interests in the BIT. There is no secondary market for an investor’s investment in the BIT and none may develop.
The BIT has limited operating history or performance.
The BIT’s sponsor has total authority over the BIT.
The BIT and its managers or advisors may rely on the trading expertise and experience of third-party managers or advisors, the identity of which may not be fully disclosed to investors.
The BIT may involve a complex tax structure, which should be reviewed carefully, and may involve structures or strategies that may cause delays in important tax information being sent to investors.
The BIT’s fees and expenses−which may be substantial regardless of any positive return− will offset the BIT’s trading profits.
The BIT and its managers/advisors may be subject to various conflicts of interest.

The above summary is not a complete list of the risks and other important disclosures involved in investing in the BIT and is subject to the more complete disclosures contained in the BIT’s confidential offering documents, which must be reviewed carefully.

[Chainsaw]

I think this is the most commonly asked question, so I wanted to move it up to one of the reserved slots, at least for the first few weeks/months.

This is another one of those pure speculation, here's what's going on in my head posts.
Wanted to share my recent theorization. This is an interesting market dynamic.

There is no guarantee that any actor is correct. But I do feel understanding motives gives insight into how the market may behave down the road.

The million dollar question right now seems to be

"WHY are people paying these 100+% premiums? Who does that?"

I couldn't quite put my finger on it either.
There are lots of pieces, and I'm unfamiliar with most.
OTC. BIT holders converting shares after 12 month holding period. Tax deferred benefits.  Value-add for convenience, safety, etc.

Put a black box around all that, and call it valuation.  WHY are people willing to pay 100% premium?

I nearly liquidated my small existing position when I had the next thought:

As soon as COIN hits the market, GBTC will have a far more liquid, high volume competitor.  The only possible way the premium could remain is if (close to) the same premium exists for COIN.
I thought, surely this means we will rocket down to current-BTC prices.
But we haven't.
Sure I just realized these things, but they have been true of the market all along.

A reasonable explanation was still missing.
IPO enthusiasm was the only possible candidate.

Then it clicked.

Simplifying the sale mechanism - the only way new shares are introduced is when a 12+ month holder sells their coins.

If 100% of the BIT holders sold their shares, no new ones would be available for purchase for 12 months.  Except on the "aftermarket", from GBTC sellers that had originally purchased from these first-sellers.

So this initial supply is limited. It is large, but it is limited.

If we assume the following:
a) COIN will eventually launch.
b) Market prices will eventually drive both COIN and $GBTC to close-to-parity with BTC market prices, with a small, constant premium.

There is one explanation for why people are willing to pay $50/share for GBTC.

The market has indicated its belief that the exhaustion of the first wave of shares, reconciled against the aftermarket seller price, will result in an equilibrium on par with market prices when BTC prices are worth no less than $500.

Said more simply, buyers believe we'll run out of shares for sale before Bitcoin valuates to $500.

I think of it like a metric from a prediction market.

[Chainsaw]

Reserved

[Chainsaw]

Let's get this speculation started!

We finally got real price discovery action today.
Looking at the orders which filled today, and the net effect on the order book, I am expecting us to bounce down into Maxim's $35 Bid before moving upwards.

I sold the few shares I had not sold at 133 and 65 at 50 today, and am hoping to rebuy just above Maxim.

While I would have been really excited about $GBTC rallying to >250% premiums over BTC...and it still could depending on what actors do over the next 2 days...but I do think consolidating in to a premium in that $350, 40% (!!!) premium range is more sensible to market participants.

If this occurs, we will suddenly move into a more liquid fund. Right now we have about 3.5k max in liquid shares. Maxim is offering up 50,000.  That must be the catalyst, unless market activity compels current BIT holders to post large offerings at higher Asks, pulling the market upwards.

[cakir]

Reserved

[Sitarow]

http://quotes.freerealtime.com/dl/frt/M?IM=quotes&symbol=GBTC&type=Time%26Sales&SA=quotes

Symbol:    GBTC 2015-05-07       
Time      Price   Volume   Market
15:38:24      40.00   227   OTO
15:29:37      45.00   25   OTO
15:29:32      45.00   16   OTO
15:29:19      45.00   100   OTO
15:19:20      47.00   9   OTO
15:16:17      45.00   25   OTO
15:13:40      47.00   25   OTO
15:11:27      47.00   8   OTO
15:11:20      47.00   2   OTO
15:03:09      50.00   20   OTO
14:55:09      50.00   5   OTO
14:53:50      50.00   100   OTO
14:47:41      55.00   9   OTO
14:35:36      55.00   5   OTO
14:14:40      50.10   10   OTO
14:09:42      55.00   100   OTO
14:08:57      55.00   7   OTO
14:08:51      55.00   2   OTO
14:04:25      55.00   100   OTO
13:58:44      55.00   5   OTO
13:58:44      55.00   9   OTO
13:58:37      50.00   5   OTO
13:58:36      55.00   5   OTO
13:58:35      55.00   190   OTO
13:58:35      55.00   100   OTO
13:58:34      55.00   25   OTO
13:58:32      55.00   100   OTO
13:58:26      55.10   100   OTO
13:58:13      56.00   100   OTO
13:55:15      60.00   2   OTO

[alani123]

Done with reserved posts?  

5$ drop from what it seems.



The short-lived upward movement wasn't met with a small drop. I'm pretty sure that it could go further down because of no support existing.

Image from:
http://quotes.wsj.com/GBTC

[Chainsaw]

Thanks for that, sitarow.
You can see the book now has 1127 Asks between $45 and $50.
With only 550 shares between the current, highest $40 and Maxim's $35.

Today is the first day there have been Asks, close to Bids, going unfilled.
That imbalance has grown as the day has gone on.

While still deciding, I think an eventual price between $35 and $65 is pretty probable.
That's still broad, but much more sane than the first day's $35-$200 range.

(1 share sold for $200.00 on the first day.)

[gotmilk_]

I think we will see some more selling pressure... Arbitrage will hit this market soon. First BIT investors can really easy double their position and will probably do that despite they won't be able to sell for another year. Those investors who are looking on those shares as a long term investment is arbitrage actually a golden opportunity now.

Will be interesting to see increase in BIT shares when they update on their page (30.5).

[ErisDiscordia]

will be interesting to watch on what sort of premium above the underlying BTC price the shares settle.

Let's make a poll and guess?

[Biodom]

will be interesting to watch on what sort of premium above the underlying BTC price the shares settle.

Let's make a poll and guess?

it should settle similarly to GLD at ~1-2% discount, NOT premium

[ErisDiscordia]

will be interesting to watch on what sort of premium above the underlying BTC price the shares settle.

Let's make a poll and guess?

it should settle similarly to GLD at ~1-2% discount, NOT premium

when has Bitcoin (and related stuffs) ever done what it SHOULD have done?  

[Chalkbot]

will be interesting to watch on what sort of premium above the underlying BTC price the shares settle.

Let's make a poll and guess?

it should settle similarly to GLD at ~1-2% discount, NOT premium

I don't think that's necessarily true, as with paper gold, you can never be sure that it's actually backed by anything, so you have to price the risk in. With BTC backed shares, there ARE mechanisms for ensuring BTC backing. Therefore it's entirely possible that there be a premium, which represents someone else handling the security and insurance of your share of BTC.

[chmod755]

The only thing that could be called a 'Wall' right now is the Maxim Group LLC buy order.

Trading volume is slowly increasing and it seems that some people realized that they could just buy BTC on the markets at a lower price.

[chriswen]

Interesting, I suppose the Second market BIT observer was getting a bit crowded.  And BIT is different from GBTC.

[snowdropfore]

glad to see this post ,i will keep an eye on it

[herzmeister]

Reserved front page seat in potentially historical thread 

[calim]

Time and Sales for Bitcoin Investment Trust (GBTC)   May 08, 2015
Symbol:           
Time      Price   Volume   Market
11:19:47      50.00   24   OTO
11:19:46      50.00   1   OTO
10:52:17      54.50   10   OTO
09:55:30      50.00   1000   OTO
09:51:48      50.00   100   OTO
09:51:31      50.00   100   OTO
09:48:37      59.00   250   OTO
09:48:34      50.00   100   OTO
09:48:31      59.00   170   OTO
09:40:07      50.00   240   OTO
09:39:47      50.00   9   OTO
09:37:40      52.00   1   OTO
09:35:30      50.00   900   OTO
05/07      40.00   227   OTO
05/07      45.00   25   OTO
05/07      45.00   16   OTO
05/07      45.00   100   OTO
05/07      47.00   9   OTO
05/07      45.00   25   OTO
05/07      47.00   25   OTO
05/07      47.00   8   OTO
05/07      47.00   2   OTO
05/07      50.00   20   OTO
05/07      50.00   5   OTO
05/07      50.00   100   OTO
05/07      55.00   9   OTO
05/07      55.00   5   OTO
05/07      50.10   10   OTO
05/07      55.00   100   OTO
05/07      55.00   7   OTO

LOTS of volume today around $50/share $500/BTC

[Chef Ramsay]

If in fact this one will be an epic thread starting a new era/trend then there should be a price for admission. ~2900 volume so far today at respectable prices and it's just about lunch time on Wall St. Now, up over $241.