GBTC Bitcoin Investment Trust Observer

[MrSunshine]

Can someone confirm this? Is trading locked or anything like that? This seems like a massive oversight if I could just dump my one share now (at roughly the same price as yesterday) and still be able to get the 90 free shares.

We're in some weird territory. The split should be locked-in, but the price hasn't dropped. This is an interesting detail in the press release:

Shareholders contemplating a transaction in the Trust's shares between the record date and payment date should consult a broker regarding their entitlement to the split shares.

It seems to imply that the bonus shares may transfer with the sale of a share. Very strange.

The way this typically happens is on Jan 26, whomever owns the shares will get the split shares. The Jan 22nd day is really to put the brokers on notice. If you sell all today you won't get any shares from the split. If you buy today and hold until jan 26th you will get the split shares. They should have just said the split will occur jan 26th.

[mmortal03]

Bitcoin Gold distribution has not happened yet for GBTC. Record date has though.

That's interesting. The BCH distribution took about five weeks from the record date, so they're taking longer on the BTG distribution.

[gentlemand]

That's interesting. The BCH distribution took about five weeks from the record date, so they're taking longer on the BTG distribution.

Does anyone know how they're managing to dispose of something like BTG? I can't imagine there's enough depth to do it on an exchange unless they're doing a painstaking drip feed.

I presume there's a point where they throw in the towel with forks. They're piling up at quite a rate now.

[CrazyLoaf]

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[mmortal03]

Does anyone know how they're managing to dispose of something like BTG? I can't imagine there's enough depth to do it on an exchange unless they're doing a painstaking drip feed.

Could be why it's taking longer. On BCH, they gave themselves a window of up to 90 days to make the sale.

[CrazyLoaf]

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[CrazyLoaf]

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[mmortal03]

Guess this is the COINXBT thread too

lol, I know you know this other one exists, but I don't mind hearing about updates: https://bitcointalk.org/index.php?topic=2310434.0

[CrazyLoaf]

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[plusalpha789]

_______________________________________________________________________________ ____

An updated version of the below writeup can be found here: https://bitcointalk.org/index.php?topic=337486.msg29315403#msg29315403
_______________________________________________________________________________ ____

I’m a newbie to the forum and have read little of this thread, but strongly suggest that anyone long GBTC consider selling, and soon if at all.  GBTC’s absurd premium to NAV has been due to the false narrative that GBTC is the only available pure-play way of gaining exposure to bitcoin in an exchange-traded vehicle.  In fact, there are alternatives in Europe that trade at a near-zero premium to NAV, and these are available to U.S. investors, depending on the broker used.

Below is a writeup that I’ve done for SeekingAlpha on a non-exclusive basis, that seems to be in their queue awaiting review/editing.  I’m assuming it is taking awhile in my case because I’m a new author there.

Bitcoin Investment Trust – the 62% premium to NAV is based on a fallacy

• GBTC currently trades at a 62% premium to underlying value based on the fallacy that it is the only exchange-traded bitcoin product available
  
  Alternative ETNs trade at a near-zero premium to NAV in Sweden and Stuttgart, and are available to U.S. investors (depending on the broker used)
  
  Availability depends on the broker – Fidelity allows trading of both securities, Schwab and Interactive Brokers do not currently (although IB did at one time).  Have not checked others.
  
  At Fidelity at least, the ETNs are eligible to be placed in IRA accounts
  
  GBTC’s 62% premium to underlying bitcoin value will collapse as this information becomes disseminated

GBTC is an ETN that has generally traded at a large premium to its underlying value of 0.09181239 bitcoin (more info at https://grayscale.co/bitcoin-investment-trust/#overview).  As of today’s close (Tue. Jan. 23), it traded for 1652.65 per share (pre the 91:1 split taking effect Friday), compared to its underlying NAV of 1021.81 per share (calculated by taking the 4 PM ET bitcoin price from bitstamp times 0.09181239 bitcoin per share). This represents a premium to underlying value of about 62%. Buying some is somewhat like paying $162 for a $100 bill.

Historically, the premium has been due to the false narrative that GBTC is the only available pure-play way of gaining exposure to bitcoin in an exchange-traded vehicle.  In fact, there are alternatives in Europe that trade at a near-zero premium to NAV.  Just google “COINXBT”.   Some details, including ISIN etc., for the ETN trading in Sweden can be found here:http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE109538.  And details for the sister ETN trading in Germany can be found here:http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE113749.  NAVs can be found here: https://xbtprovider.com/.

Generally both trade close to NAV (e.g., zero premium), in contrast to the 62% premium for GBTC.  I have accounts at three brokerages.  Fidelity allows trading of both the European ETNs.  Schwab does not.  Interactive Brokers does not (although it used to).  I even placed a small order, which executed, at Fidelity (not more because I am already long a basket of crypto and don’t need more and would prefer futures over an ETN anyway).

I also confirmed with Fidelity that both the Sweden-traded and the sister Stuttgart-traded ETNs can be held in IRAs.  This last point is key.  After bitcoin futures became available in the U.S. last month, GBTC "premium apologists" claimed that the GBTC premium was justified, as GBTC was the only way of getting pure bitcoin exposure into an IRA.  That is not true.

Details at Fidelity are as follows.  Taxable accounts can execute online, the symbols are BITCOIN_XBT:SE (trading in Sweden, in krona) and BITCOIN_XBTE:SE (trading in Germany, in euro).  For an IRA, the trade can only be placed with a human, not online, by calling their international desk at 800-544-2976, so the commission is higher than for online trades in a taxable account.  I only checked with Fidelity, Schwab, and IB, so I don't know which other brokers, besides Fidelity, might offer trading in these ETNs.  Perhaps if readers find others, the information could be added in comments below.

Given that GBTC sells for a premium of 62%, or about $631 per share, every share of GBTC sold at that premium and replaced with COINXBT can save the investor roughly $631 before commissions/fees.  If you own, or have been considering, GBTC as a long, check with your broker…if yours doesn’t allow trading of COINXBT instead of GBTC, it might be worthwhile finding one who does…as long as the high GBTC premium persists, that is.  We think the premium is likely to begin compressing quickly once this information is disseminated.

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ADDED Jan. 30:

(1) To trade any of these at Fidelity, make sure your account is enabled for international trading, then hover over "Accounts & Trade" until you get the dropdown > select "Trade" > "International" tab > then enter one of the Fidelity-specific symbols such as "BITCOIN_XBT:SE".  If you have any trouble or need to do the trade in an IRA, which requires a human, call their international desk is at 800-544-2976.

(2) There are also sister exchange-traded Ethereum vehicles, similarly available to U.S. investors (including IRAs) via Fidelity (and possibly other brokers)...further details are in post 2096, some of which is repeated here:

You can google “Ethereum XBT” or “COINETH”.  Details can be found at

http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144580 (trading in Sweden in krona) and

http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144581 (trading in Stuttgart in euro)

https://xbtprovider.com/ provides NAVs.  The ETNs trade very close to NAV, instead of the substantial premium that GBTC trades at in the U.S. vs. its underlying value in bitcoin.  The availability of these to U.S. investors is another reason that GBTC's current 70% premium (as of 1/29) to NAV might come down.

At Fidelity, taxable accounts can execute online, the Fidelity symbols are ETHEREUM_XBT:SE (trading in Sweden in krona) and ETHEREUM_XBTE:SE (trading in Stuttgart in euro).  For an IRA, the trade can only be placed with a human, not online, by calling their international desk at 800-544-2976, so the commission is higher than for online trades in a taxable account.
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ADDED Jan. 30, part 2:

GBTC premium can be calculated as follows (post the Jan. 29 91:1 stock split):
0.00100733 bitcoin per share GBTC (per the sponsor: https://grayscale.co/bitcoin-investment-trust/
times bitcoin price from https://www.bitstamp.net/market/tradeview/
equals underlying net asset value.
Compare to GBTC price.  
At 4pm close Jan. 30, NAV, GBTC price 17.51, a 74% premium to the NAV of 10.07 (0.00100733 bitcoin/share x 9979 bitcoin price)
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DISCLOSURE:  I/we are short shares of GBTC, and long a basket of cryptocurrencies.  (The hedge isn’t purely bitcoin because we believe Ethereum and certain other cryptocurrencies will outperform bitcoin.)  

[DieJohnny]

Historically, the premium has been due to the false narrative that GBTC is the only available pure-play way of gaining exposure to bitcoin in an exchange-traded vehicle.


DISCLOSURE:  I/we are short shares of GBTC, and long a basket of cryptocurrencies.  (The hedge isn’t purely bitcoin because we believe Ethereum and certain other cryptocurrencies will outperform bitcoin.)  

It isn't a false narrative if it is true. For most people, including myself it IS the only exchange-traded exposure for bitcoin you can purchase.... It doesn't matter that some small subset of people can buy euro-traded bitcoin assets... that is nonsense.

At least you disclosed that you are short GBTC.

GBTC will trade at a premium until alternatives show up in my trade account, why? because I have money in my account that i won't take out because of tax advantages and I want BTC exposure, so I have one choice, pretty simple. NOT fiction.

[plusalpha789]

It isn't a false narrative if it is true. For most people, including myself it IS the only exchange-traded exposure for bitcoin you can purchase.... It doesn't matter that some small subset of people can buy euro-traded bitcoin assets... that is nonsense.

At least you disclosed that you are short GBTC.

GBTC will trade at a premium until alternatives show up in my trade account, why? because I have money in my account that i won't take out because of tax advantages and I want BTC exposure, so I have one choice, pretty simple. NOT fiction.

A subset of people may currently have accounts eligible to trade the European ETNs.  But those who don't have such accounts can move their accounts to Fidelity or other brokerages that allow such trading.  It is easier than most people realize to transfer an entire account from one brokerage to another.  That includes IRA accounts.  Saving $600 or so per GBTC share might make such a move worthwhile, for many people.

[plusalpha789]

For anyone interested in an arb play (long bitcoin futures or COINXBT, short GBTC), as of yesterday GBTC was available to borrow at Schwab at a 6.5% annual rate.  It was not available at Fidelity or IB.

[plusalpha789]

Any suggestions for an alternative from anyone?

COINXBT and COINETH can be traded at Fidelity (including in IRAs), see this post: https://bitcointalk.org/index.php?topic=337486.msg28835640#msg28835640

[mmortal03]

Any suggestions for an alternative from anyone?

COINXBT and COINETH can be traded at Fidelity (including in IRAs), see this post: https://bitcointalk.org/index.php?topic=337486.msg28835640#msg28835640

Just checked, and it's not available with USAA as of yet, for anyone who may use them.

[plusalpha789]

More info on exchange-traded Ethereum vehicle - trades in Europe but available to U.S. investors using Fidelity and possibly other brokers:

You can google “Ethereum XBT” or “COINETH”.  Details can be found at

http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144580 (trading in Sweden in krona) and

http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144581 (trading in Stuttgart in euro)

https://xbtprovider.com/ provides NAVs.  The ETNs trade very close to NAV, instead of the substantial premium that GBTC trades at in the U.S. vs. its underlying value in bitcoin.  The availability of these to U.S. investors is another reason that GBTC's current 63% premium to NAV might come down.

At Fidelity, taxable accounts can execute online, the Fidelity symbols are ETHEREUM_XBT:SE (trading in Sweden in krona) and ETHEREUM_XBTE:SE (trading in Stuttgart in euro).  For an IRA, the trade can only be placed with a human, not online, by calling their international desk at 800-544-2976, so the commission is higher than for online trades in a taxable account.

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ADDED Jan. 30:
To trade any of these at Fidelity, make sure your account is enabled for international trading, then hover over "Accounts & Trade" until you get the dropdown > select "Trade" > "International" tab > then enter one of the Fidelity-specific symbols such as "ETHEREUM_XBT:SE".  If you have any trouble or need to do the trade in an IRA, which requires a human, call their international desk is at 800-544-2976.

[CrazyLoaf]

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[megadeth]

More info on exchange-traded Ethereum vehicle - trades in Europe but available to U.S. investors using Fidelity and possibly other brokers:

You can google “Ethereum XBT” or “COINETH”.  Details can be found at

http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144580 (trading in Sweden in krona) and

http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144581 (trading in Stuttgart in euro)

https://xbtprovider.com/ provides NAVs.  The ETNs trade very close to NAV, instead of the substantial premium that GBTC trades at in the U.S. vs. its underlying value in bitcoin.  The availability of these to U.S. investors is another reason that GBTC's current 63% premium to NAV might come down.

At Fidelity, taxable accounts can execute online, the Fidelity symbols are ETHEREUM_XBT:SE (trading in Sweden in krona) and ETHEREUM_XBTE:SE (trading in Stuttgart in euro).  For an IRA, the trade can only be placed with a human, not online, by calling their international desk at 800-544-2976, so the commission is higher than for online trades in a taxable account.

Can you provide more detail on this? I asked Fidelity multiple times if they offered COINXBT and COINETH as recently as last month and they said that they did not. Also, please note above where I said Interactive Brokers delisted this stock and also forced liquidation on the position today. Who is to say that Fidelity won't do the same thing?

I'm fairly certain that the GBTC premium will remain until another US based alternative emerges for non-accredited investors. I held COINXBT for years and I will have to pay so much in short-term gains taxes as a result of Interactive Broker's honestly shitty handling of this situation that it would have honestly been better if I had just paid the 30% premium to GBTC on a recent large purchase I made early 2017 (hence the short-term gain tax). 

You can move the funds to Fido and buy back the ETN's

[plusalpha789]

Can you provide more detail on this? I asked Fidelity multiple times if they offered COINXBT and COINETH as recently as last month and they said that they did not. Also, please note above where I said Interactive Brokers delisted this stock and also forced liquidation on the position today. Who is to say that Fidelity won't do the same thing?

I'm fairly certain that the GBTC premium will remain until another US based alternative emerges for non-accredited investors. I held COINXBT for years and I will have to pay so much in short-term gains taxes as a result of Interactive Broker's honestly shitty handling of this situation that it would have honestly been better if I had just paid the 30% premium to GBTC on a recent large purchase I made early 2017 (hence the short-term gain tax). 

As long as your Fido account is enabled for international trading, just go to trade / international tab and then enter as a symbol BITCOIN_XBT:SE or BITCOIN_XBTE:SE (SEK and euro, respectively, and the symbols are probably specific to Fidelity). 

For anyone else not at Fidelity, if your broker can't handle these ETNs, it might be worth transferring your account.  Each GBTC share you replace with one of the zero-premium European-traded ETNs saves you something like $635, based on the current high GBTC premium.

Here is a link to a small test trade I did at Fidelity the other day: https://stocktwits.com/plusalpha/message/110305506

[CrazyLoaf]

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