Recently, many reports are about Grayscale(GBTC), many people says that GBTC bought large amount of bitcoins, it means the fund in wallstreet are interested in Bitcoin now.
As i know, there are some big agencies in wallstreet are really interested in Bitcoin, like a16z, Goldman Sachs, JP morgan ..etc
But why GBTC are buying so many bitcoins? Seems the price of Bitcoin is too high for a new buyer.
This picture was posted on GBTC offical twitter, we can know that GBTC are HODLING about 360K+ Bitcoins now, that is a big number. But something you should know that not every customers are cash deposits.
According to the report GBTC own reports , in the second and third quarters of 2019, more than 70% of private placements were made by customers using their own BTC to replace GBTC shares, and less than 30% of them were cash deposits.
Seems some people are tring to do arbitrage transaction but not hold BTC.How did they do?
We know Genesis Capital have lots of cooperations with Grayscale, and Genesis is doing buisness for crypto lending. The picture shows that the loan amount in Genesis are growing well.
Let me imagine:
Compared with the advantages of holding real bitcoin and the needs of users, GBTC has maintained a large premium.If the agency borrows BTC to participate in the private placement of GBTC in the primary market and waiting for 6month then they sell bitcoin in the market, and then buy BTC to repay the loan, the premium of GBTC share over BTC is the profit part. As we know, compared with the premium of GBTC, the interest of BTC borrowed is much lower. Although there is a six-month waiting time for this operation, as long as is still have premium , that would be a nice return with 0 RISK.
Or, they can buy BTC from spot, get GBTC share from deposit, and open short hedging with futures. After GBTC was unlocked, they sell it to market the close the futures position , that would be a wonderful arbitraged trade.
So i think something are clearly, maybe agencies are more interested in Bitcoin than before, but it doesn't means they want to buy it now. Everyone want to buy at a low price.
We need to chill while lots of reports are rendering the story. Bitcoin will be the most strong assets, but there is a long long way to go
Good luck to every bitcoiner.
