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

[fillippone]

Apparently Grayscale is luring into their shares also some investors that should be able to independently gain exposure to bitcoin:

BlockFi Acquires a 5% Stake in the Grayscale Bitcoin Trust (GBTC), Becomes a Top Shareholder

BlockFi, the crypto lending focused firm, has invested in the Grayscale Bitcoin Trust (GBTC), becoming one of the biggest shareholders. According to a filing made with the U.S Securities Exchange Commission (SEC), the firm purchased 5.07% of the GBTC Trust. Notably, companies in the U.S are required to report through form 13G if they own more than 5% in another firm.

The filing further reveals that the shares acquired by BlockFi translate to 24,235,578 of the GBTC Trust. Going by the latest Grayscale annual filings, this value is roughly 24,235.578 Bitcoins, given that every share is priced at 0.0001 BTC. As per the prevailing crypto market prices, the BlockFi investment in GBTC is roughly $328 million.

Ah! Someone explain me why should BlocKFi invest in Grayscale for any other reason than playing the NAV-Stock Market arbitrage on the back of the retail investors.
Give your bitcoin to Grayscale and in-kind buy the shares in the primary market (without touching a single USD). Then sell a future on the market. Wait six months, sell the shares, get your Bitcoin Back and buy back the futures.
You have just locked in a juicy 20% net profit on your bitcoins. Free risk.
GBTC is more than happy for this, as in the meanwhile they got a free marketing campaign (“BlocKFi just bought 5% of GBTC! That must be a super good investment! Let’s buy some too!”) and above all, 1% management fee. Again, net of risks.

Also, please tell the journalist to read this thread, so that he can do the proper math and exactly know how many BTC BlocKFi bought.

The filing was posted on October 15, the day after GBTC reopened the share issuance after a brief hiatus. That day they sold a little bit more than 7 millions shares. So BlocKFi surely was already long GBTC, but that last buy triggered the 5% reporting threshold.

[Karartma1]

Spot on fillippone: I was actually trying to understand such a move and now you probably gave the right explanation.
The bitcoin game is becoming too big and it started assuming all those financial dynamics that I believe the majority of cypherpunks would have probably rejected.
Let's never forget that for the financial world, right now, bitcoin is just another asset to be monetized.
Anyway, growing up is hard and I sincerely hope that the core will stay incorruptible.

[fillippone]

Another addition to the spreadsheet.
Who owns Grayscale shares?

Have a look here:



Here you have a manually updated list of publicly disclosed sources of GBTC holdings.
You can see the recent acquisition by BlockFi, as other joining in.
Can you also spot Barry Silbert himself?

[chip1994]

Looks like another scam to get hold of peoples money.

Grayscale is a large financial fund and is planning to dabble in our crypto market. It is not a project, Grayscale gives confidence to fans of Bitcoin and even the crypto market.
So read carefully the article to better understand Grayscale, it will give you a lot of knowledge so you can dig deeper into the essence of Grayscale's strategy.

[Swordsoffreedom]

Today I've got an email from our local investment advisor community, Coindesk has organized an event for Financial Advisors. Michael Sonnenshein (Managing Director of Grayscale Investments) will give a valuable speech in this online event. The focus of the discussion is "How to promote Bitcoin with clients." there will be talks about the success of Grayscale too.

If you are a Registered Investment Advisor of any organization like Bank or Trust Agency then you can apply here to join.

For Application- https://events.bizzabo.com/bitcoin-for-advisors/home

[fillippone]

Interesting analytics on Twitter:

Viktor Fischer of the Rockaway Blockchain Fund analyzed the activity of the Grayscale Bitcoin Trust and came to the conclusion that since the halving of bitcoin GBTC has acquired an average of 900 BTC ... PER DAY.

Interesting metric: what does my Spreadsheet says about that?
Just adding a new Pivot Table in the spreadhsteet I was able to construct those graphs:





They look pretty similar, bar some not overwhelming differencies I couldn't reconcile.
After the halving Grayscale has been buying more than the daily mined bitcoin on several months.
October and November are also showing again surge in volumes.

What I mean is: what you are reading around on thwitter is already under your eyes, if you know where to look!

[fillippone]

JP Morgan is going full bonkers about Bitcoin.
They are shilling Bitcoin to their clients now:


Family Offices May Now See Bitcoin as Alternative to Gold: JP Morgan Report

The GrayScale Bitcoin Trust is outperforming gold exchange-traded funds, a trend perhaps driven by institutional investors like family offices, according to a report by JPMorgan analysts that CoinDesk obtained.

• “This contract lends support to the idea that some investors that previously invested in gold ETFs such as family offices, may be looking at bitcoin (BTC, +4.48%) as an alternative to gold,” the analysts wrote in the Nov. 6 report.
• The climb of the Grayscale Bitcoin Trust indicates it's not just millennials driving demand for bitcoin, but institutional investors like family offices and asset managers, the analysts said. Grayscale is part of Digital Currency Group, CoinDesk's parent company.
• The analysts continued: “As we had highlighted in our previous [report] of October 23rd, the potential long-term upside for bitcoin is considerable if it competes more intensely with gold as an ‘alternative’ currency given that the market cap of bitcoin would have to rise 10 times from here to match the total private sector investment in gold via ETFs or bars and coins.”
• The analysts noted, however, that the “sharp spike in prices this week appears to have taken bitcoin close to overbought levels” which could trigger a sell-off.

What makes the October flow trajectory for the Grayscale Bitcoin Trust even more impressive is its contrast with the equivalent flow trajectory for gold ETFs, which overall saw modest outflows since mid-October(Figure 7).
This contrast lends support to the idea that some investors that previously invested in gold ETFs such as family offices, may be looking at bitcoin as an alternative to gold. As we had highlighted in our previous F&L of October 23rd, the potential long-term upside for bitcoin is considerable if it competes more intensely with gold as an“alternative” currency given that the market cap of bitcoin would have to rise 10 times from here to match the total private sector investment in gold via ETFs or bars and coins

So, not only they are still upbeat about  future Bitcoin scenario, reiterating the bullish view on past weeks, but they are also telling us that many clients are already shifting their assets from "physical gold" to "digital gold".
This is very bullish given the sheer size of the JP Morgan AUM and the fact that their clients are certainly on the top percentiles of financial wealth.
 

[nixon98]

Slightly off OP topic, but I didn't want to start my own thread as I imagine it can be answered relatively quickly.
My question is, which is the best tracker to invest in if you consider the euro will lose value in the near term and money will pour into the dollar?
These are the 2.
Dollar
XBT Provider Bitcoin Tracker One (BIT-XBT)
https://www.hl.co.uk/shares/shares-search-results/x/xbt-provider-bitcoin-tracker-one

Euro:
XBT Provider Bitcoin Tracker Euro (BIT-XBTE)
https://www.hl.co.uk/shares/shares-search-results/x/xbt-provider-bitcoin-tracker-euro

[fillippone]

<...
My question is, which is the best tracker to invest in if you consider the euro will lose value in the near term and money will pour into the dollar?
<...>

I think the best is the following one:

ETC Group to launch bitcoin ETP on Deutsche Boerse

It also should be available in UK, if I am not mistaken.
These are real BTC, not CFD...

[Lucius]

JP Morgan is going full bonkers about Bitcoin.
They are shilling Bitcoin to their clients now

Obviously they have learned a lesson from the past and now they don’t want to miss the earning opportunity, and Bitcoin is something unique in the market that is currently a hot commodity.

What actually makes me happy is that they may have figured it out with one good delay (though it’s never too late), so all small investors who invest smartly over the years finally have a chance to turn out a lot smarter than big investment banks and funds.

[fillippone]

Again on the massive Growth of GBTC.

We all saw some permutation of the following:

WOW.
@Grayscale
 added $500 million in new assets under management in a single day.

They're now over $9 billion in total AUM.

Someone stop @Sonnenshein and @BarrySilbert before they buy up everything and there is nothing left for the rest of us!

https://twitter.com/APompliano/status/1324838120337084420?s=20

I think the fairer metric to look at it is consider directly BTC, forgetting the FIAT value.

The growth has been nonetheless dramatic.

Just look at this graph directly from the spreadsheet:



Today, tomorrow maybe if it is going to be a slow day, GBTC is going to cross 500K BTC in AUM (you read it here first!).

They crossed 400,000 BTC at the beginning of  August: they grew 25% in the last three months, with an increasing average price!
Looks like an incredible Bull run (in the GBTC AUM)!

Luckily this didn't translate in an increased premium, pointing that who wanted to buy Shares, wasn't willing to buy on the secondary market.



Probably some whale trying to monetize their stash with in-kind buying?

[Karartma1]

Holy Gray(l)scale is at it again: trying to own all the bitcoin production! I wonder how much of their activity influences the price and in what %.
Thomas Lee saw it before others in 2018: I remember his data got dismissed but they were just a little ahead of times.
https://twitter.com/fundstrat/status/988817606604881920

[nixon98]

<...
My question is, which is the best tracker to invest in if you consider the euro will lose value in the near term and money will pour into the dollar?
<...>

I think the best is the following one:

ETC Group to launch bitcoin ETP on Deutsche Boerse

It also should be available in UK, if I am not mistaken.
These are real BTC, not CFD...

Many thanks for your quick response.  Grayscale and ETC look very attractive right now.  Unfortunately, they are not offered by my broker.  They only offer XBT.

[fillippone]

Many thanks for your quick response.  Grayscale and ETC look very attractive right now.  Unfortunately, they are not offered by my broker.  They only offer XBT.

Those two products are offered by Coinshares. As you noted, the only difference is the currency used for the NAV computations. If you want to protect yourself against of the EURO you should invest in the dollar one. But ultimately it is not a big issue, as a crumbling Euro would send the BTCEUR cross on the moon, without much effect on the BTCUSD. You might invest in the USD one just to avoid redenomination risk (in case of an EUR breakup).

[zasad@]

https://decrypt.co/48277/grayscale-buys-240m-in-bitcoin-in-largest-capital-raise-week-ever

Grayscale Buys $240m in Bitcoin In Largest Capital Raise Week Ever
"Grayscale, which runs the Grayscale Bitcoin Trust (GBTC), bought this week another 15,114 Bitcoin ($241 million). GBTC holds 481,711 Bitcoin, representing 62% of all Bitcoins in the ownership of publicly-traded companies.
Grayscale Bitcoin Trust (GBTC), which was created in 2013, is the company’s biggest trust. The total value of assets managed by Grayscale Bitcoin Trust (GBTC) now exceeds $8.2 billion.
GBTC holds 481,711 Bitcoin, which corresponds to 62% of the 814,359 Bitcoins in the ownership of publicly-traded companies."

[Lucius]

Really impressive, they buy regardless of the price and if they continue like this I wonder how long it will take them to double the amount they already have and approach the amount of 1 million BTC in their possession?

According to the data presented by fillippone, at the beginning of August they were at 400 000 BTC, now they have almost 82 000 more and there is no doubt that by the end of the year they will reach 500 000 BTC, so if they buy around 100 000 on average every 4 months, by the end of next year the total amount could exceed as much as 800 000 BTC.

[acquafredda]

Really impressive, they buy regardless of the price and if they continue like this I wonder how long it will take them to double the amount they already have and approach the amount of 1 million BTC in their possession?

According to the data presented by fillippone, at the beginning of August they were at 400 000 BTC, now they have almost 82 000 more and there is no doubt that by the end of the year they will reach 500 000 BTC, so if they buy around 100 000 on average every 4 months, by the end of next year the total amount could exceed as much as 800 000 BTC.

They must have rolled out a very detailed strategy with many scenarios to change their buying habits according to some KPIs we do not know.
For us it is indeed impressive to watch this massive growth in their holdings.
On the long run these players are kind of cornering the market (until the average Joe will realize that there are not enough bitcoins for everyone). All good!

[fillippone]

<...>
They must have rolled out a very detailed strategy with many scenarios to change their buying habits according to some KPIs we do not know.
For us it is indeed impressive to watch this massive growth in their holdings.
On the long run these players are kind of cornering the market (until the average Joe will realize that there are not enough bitcoins for everyone). All good!

I am afraid they do not have any plan or strategy to buy the bitcoins. They only react to money inflows of in-kind buying.
This is their business model: they don’t risk their own money, that would require a proper buying plan, but they only look for their risk free daily management fees of 27 bitcoins. Whatever the price their client get long bitcoins.

[Skorillo]

You saw that? - 500k


https://cointelegraph.com/news/grayscale-now-has-half-a-million-bitcoin

[fillippone]

You saw that? - 500k


https://cointelegraph.com/news/grayscale-now-has-half-a-million-bitcoin

It has been reported many times on this thread, and is something very easily trackable using the spreadsheet.
So yes, I think all of us saw that.
This is actually the point of the thread: build knowledge first-hand, without delegating this kind of low effort analysis to news outlet.