Everything you wanted to know about Grayscale BTC Trust but were afraid to ask!

[fillippone]

The Grayscale BTC Trust discount to NAV continues to update its records and already on October 13 reached its maximum of 36.7% and as of October 14 is 36.47% I wonder how long this will last.

Nothing can stop this downtrend.
I hoped the start of the Lawsuit against the SEC could at least slow this process.

Last hope is a bullish market. Until then, I have little hope at this point.

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[JayJuanGee]

I think many concepts about this fund have been oversimplified, and a few technical details of the inner functioning could better serve a global understanding on how this fund works, how it is used by institutional investors, be it “fiat investors” or whales, and by retail investors.

Are you basing your insightful conclusions on the title of the thread?

Or maybe you come to such insights from the last few posts of the thread?

Have you even read this thread or other information about the Grascan BTC fund?

How are you coming to such profound questions in regards to this supposed mystery fund that has been in existence for about 8 years, but no one seems to know how it works?

There must be some conspiracies keeping information away from regular people like us out there, right?

[fillippone]

I think many concepts about this fund have been oversimplified, and a few technical details of the inner functioning could better serve a global understanding on how this fund works, how it is used by institutional investors, be it “fiat investors” or whales, and by retail investors.

You are more than welcome sharing your knowledge, adding details, correcting errors, misconceptions or anything other you might thing not valuable.

Everyone here on this thread is here to learn.

No sarcasm intended.

[Daltonik]

Here, the Blockchain Association organization decided to support Grayscale in the case against the SEC acting as amici curiae and sent a statement to the court regarding the Grayscale Investments process against the SEC, stating that their steps are aimed at protecting the crypto industry and providing American consumers with access to innovative products.
Of course, this does not make the Blockchain Association a party to the lawsuit and is not involved in the case, but it seems to me that this can help in creating a complete picture of violations by the SEC

https://twitter.com/BlockchainAssn/status/1582490567094972416

[fillippone]

<...>
Of course, this does not make the Blockchain Association a party to the lawsuit and is not involved in the case, but it seems to me that this can help in creating a complete picture of violations by the SEC

https://twitter.com/BlockchainAssn/status/1582490567094972416

Meh.
Just Remember that Grayscale sits on an incredibly vast amount of BTC, who generate 35 BTC worth of fees every given day, Sundays included.
I suspect this is a big enough reasons why so many interest groups start flocking on the side of Grayscale..

[Daltonik]

Against the background of the FTX news, it seems that the market does not yet see grounds for a reversal and continues to fall, along with it, the discount on GBTC shares relative to the value of the underlying asset stored in the fund increased to a new record 41.69%.



All centralized exchanges are feverishly starting to publish data on their reserves, while there are rumors that for this they are starting to transfer funds to each other, as it was with Crypto.com who transferred Gate 320k ETH by "mistake" 
https://twitter.com/kris/status/1591605600638881792

[fillippone]

Against the background of the FTX news, it seems that the market does not yet see grounds for a reversal and continues to fall, along with it, the discount on GBTC shares relative to the value of the underlying asset stored in the fund increased to a new record 41.69%.



All centralized exchanges are feverishly starting to publish data on their reserves, while there are rumors that for this they are starting to transfer funds to each other, as it was with Crypto.com who transferred Gate 320k ETH by "mistake" 
https://twitter.com/kris/status/1591605600638881792

If I manage to find an excel historical serie, I want to test the history of NAV discount against price. I bet there is a negative correlation: when the price dumps, the discount rise, and viceversa, of course with a negative drift.
I could have done it myself if only Grayscale hadn’t become so picky with scrapers. But stay tuned.

[franky1]

All centralized exchanges are feverishly starting to publish data on their reserves, while there are rumors that for this they are starting to transfer funds to each other,

no.

its not about throwing coins into a wallet today to then publish a screen shot to show exchangeA is liquid today. then move those funds out straight away and use same funds in exchange B to publish to make exchange B look liquid... thats not how publishing of reserves work

its more so listing their cold wallet addresses. much like how the website bitcoinrichlist tags the exchange names to their wallet addresses. so that any time people want to, can view how much an exchange has in cold wallets.. where they can just look up the wallet tag name and see how much the exchange has in custody at any time..

..
if any fund shuffling rumour is true.. then its a sign that exchanges were operating fractional reserves by instead of holding assets in reserve in their own exchange(as they should do) they were previously putting user assets on other exchanges to trade for exchange owner profits using users funds(should not be doing this) and so now pulling those coins back into the exchange they suppose to be reserved on, to then show they still had control of coins in one place

[OgNasty]

As the premium grows this becomes more and more enticing.  It's basically a bet that it will be converted to a spot ETF or liquidated before fees eat away any gain you would have gotten from the premium disappearing.  I think at a more than 40% premium it might be worth grabbing a little here for retirement accounts.  I think we'll see an approval in the next couple of years and I have a hard time fathoming that this fund will continue as is and not dissolve itself if the premium continues to grow.  For gamblers who think that an ETF approval could come sooner rather than later, it also could make an attractive options play. 

[franky1]

As the premium grows this becomes more and more enticing.  It's basically a bet that it will be converted to a spot ETF or liquidated before fees eat away any gain you would have gotten from the premium disappearing.  I think at a more than 40% premium it might be worth grabbing a little here for retirement accounts. 

premium? you mean discount

at a 2% a year fee. means a 30% discount implies a couple decades worth of peace of mind before break even/loss

extending the discount further implies it will take longer to get the ETF operational so they are offering more discount to offer more peace of mind.. you you are correct. its for retirement as it seems it may take that long before people are able to truly cash out at a true bitcoin rate(converted to a spot rate)

[fillippone]

As the premium grows this becomes more and more enticing.  It's basically a bet that it will be converted to a spot ETF or liquidated before fees eat away any gain you would have gotten from the premium disappearing.  I think at a more than 40% premium it might be worth grabbing a little here for retirement accounts. 

premium? you mean discount

at a 2% a year fee. means a 30% discount implies a couple decades worth of peace of mind before break even/loss

extending the discount further implies it will take longer to get the ETF operational so they are offering more discount to offer more peace of mind.. you you are correct. its for retirement as it seems it may take that long before people are able to truly cash out at a true bitcoin rate(converted to a spot rate)

Correct, you can interpret the NAV discount as a "bet" on the timing of the ETF conversion. If you buy GBTC you get the discounted BTC, and start paying 2% annually. If the conversion happens before this 2% accrual get equal to the discount you locked up buying, then you realised a profit, otherwise you realise a loss.
So the discount can be interpreted as the probability of the GBTC being converted into an ETF quoted by the market. 

[TommieSang]

Traditional investment institutions influence and even manipulate the price of bitcoin. Even though everyone agrees that bitcoin is decentralized enough that it can't be manipulated easily, the fact is that there is always someone or an institution that can do so.

[fillippone]

Today I was checking again the Grayscale website.
I noticed there is a link to download a csv file with all the data I need.
You can find on this page clicking on “Export Data”
I wasn’t able to load it in a Google sheet trough the usual function “importdata”

=IMPORTDATA("https://grayscale.com/wp-content/uploads/market-data/btc.csv?v=265170",",","en_US")

Is anyone of you able to do so?

[JayJuanGee]

Traditional investment institutions influence and even manipulate the price of bitcoin. Even though everyone agrees that bitcoin is decentralized enough that it can't be manipulated easily, the fact is that there is always someone or an institution that can do so.

Ok.  So do you have some kind of a further point?  Many of us likely realize that there is always going to be some manipulations in markets, and likely BIGGER players (or even those who are trying to trade an asset or to trade other assets that might correlate to an asset) are incentivized to manipulate prices as much as they are able to, if they believe that they have good chances to profit from such manipulation.. whether they profit within the targeted manipulated asset or some potentially correlated asset.

Sure the BIGGER and more liquid an asset, then the more difficult it will be to manipulate the asset - but at the same time, there can still be ways in which weak points could be identified - and incentives could still be great to achieve small moves in any asset - and we likely realize that very large players have already figured out ways to make stupendous profits on very small percentage moves in an asset/currency class (such as forex trading) if they can figure out the price direction that is likely to move in advance... but still they might have some plays that they attempt to make that are more certain than other plays, but still NOT have 100% assurance that the bets that they make might not end up backfiring on them at some point.... maybe falling in line with the concept that markets sometimes being able to stay irrational way longer than any of us is able to stay solvent.

For sure there are some ways that Bitcoin is relatively "small" as an asset class and can be manipulated, but it still has a very decent amount of liquidity and also some kinds of properties (including abilities to directly possess it) that create some unique qualities that can end up changing the calculations in regards to ways that it might be able to be manipulated or even to be able to leverage other projects, including debt, various shitcoins, perhaps legitimate projects and even scams.

So how can blanket statements about whether bitcoin is manipulatable or not be contextualized beyond merely blanketedly asserting that manipulation exists or does not exist?

[fillippone]

I finally updated my spreadsheet!

Good ol'Graphs are now updated again!




Flows:



Note how much the AUM in BTC has decreased since the last inflow: this is the 2% fee eroding the total stash.

[Husires]

I wonder, after all the recent events that have proven the fragility of the situation in many crypto exchanges and inflections, which may increase in the coming days, how is the situation with Grayscale BTC? Does anyone know if the price fell to 2019 prices, will they buy more, or have we reached the top?
Do they have any investments in exchanges tokens (BNB, FTT, OKX)?

[fillippone]

I wonder, after all the recent events that have proven the fragility of the situation in many crypto exchanges and inflections, which may increase in the coming days, how is the situation with Grayscale BTC? Does anyone know if the price fell to 2019 prices, will they buy more, or have we reached the top?
Do they have any investments in exchanges tokens (BNB, FTT, OKX)?

Absolutely. GBTC is a Bitcoin only investment. They don’t indulge in anything different from the BTC they hodl for their customers. So no tokens, no shitcoin, no projects they financed. They get paid huge money only to hodl your coins.

Apart from that, the investment is closed. So ther aren’t issuing any new share. This would make little sens with a discount of the 40%: who would buy a new share at the 100% of the face value if you can but with a 40% discount on the secondary market?

[franky1]

I wonder, after all the recent events that have proven the fragility of the situation in many crypto exchanges and inflections, which may increase in the coming days, how is the situation with Grayscale BTC? Does anyone know if the price fell to 2019 prices, will they buy more, or have we reached the top?
Do they have any investments in exchanges tokens (BNB, FTT, OKX)?

Absolutely. GBTC is a Bitcoin only investment. They don’t indulge in anything different from the BTC they hodl for their customers.

GBTC is a token of a pegged BTC pegged at a discount

however greyscale. the holding company.. has holdings in other tokens too
https://grayscale.com/assets-under-consideration-and-current-products/

we witnessed previously how other cryptos failed in last couple years and greyscale(company) had to do some asset shuffling earlier this year  to balance out the losses(reaction to the 3arrow capital(luna/terra) fiasco)

its worth noting..
greyscale is part of DCG... and DCG is invested in FTX
https://dcg.co/portfolio/#f

so although GBTC might/might not see some change to its pegged discount(no real drama) of GBTC token

greyscale aka DCG might see losses of the greyscale company investments at their internal management level.

[fillippone]

At least someone is trying to catch the falling knife:

Ark Invest picks up $2.8 million worth of Grayscale Bitcoin Trust shares

I am sure a 2.8 million investment is nothing more than a small chip for them, but I guess they just want to plant a flag at -39% discount. It makes sense: in case of Bitcoin rally, and maybe renewed interest in GBTC tightening the spread, buying BTC at 10k has a meaning!

[fillippone]

It's a never-ending drama!



Premium is definitely headed south:



Please GBTC SHTAP!