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

[fillippone]

After nine days of new investment closure, a buyback announcement, and some shady moves, still GBTC premium is still negative:



I guess primary market whales are quite pissed off by this, and for sure you don't want to piss off your better clients.
Also given the fact there is a huge lockdown expiry in the coming months:



First big outflow expected before the end of March, with massive outflow in April-July.
Dangerous times ahead.

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[DaRude]

After nine days of new investment closure, a buyback announcement, and some shady moves, still GBTC premium is still negative:



I guess primary market whales are quite pissed off by this, and for sure you don't want to piss off your better clients.
Also given the fact there is a huge lockdown expiry in the coming months:



First big outflow expected before the end of March, with massive outflow in April-July.
Dangerous times ahead.

Yep pretty much everyone in the 6m pipeline is loosing money. They're loosing, 1% in management fee, the discount over secondary, and 6m time value of money. Should've been trivial for Grayscale to see that secondary wouldn't be able to absorb the insane BTC10k of daily inflows, but you know those management fees are so hard to pass on. Oh well, hedge funds get screwed while retail enjoys a discount for next 6m i say it's a win/win

[thecodebear]

And here it is:

Grayscale is interested in filing for a US bitcoin ETF if regulators give the green light, its chief executive says

• Grayscale's CEO told Insider the firm would be interested in filing for a bitcoin ETF.
• The $37 billion Grayscale Bitcoin Trust is currently the world's biggest crypto fund.
• Michael Sonnenshein said he thought it is a matter of "when, not if" the US approved a bitcoin ETF.

Of course, being the first in the ETF camp would be a gargantuan advantage for Grayscale, who could turn their Trust into an ETF.
Sadly, this would imply slashing their fees.
So I guess they are using at least part of the 35 BTC they gobble on a daily basis to lobby against any ETF approval since then.

I wouldn't say sadly they will have to slash their fees...their fees are only high because they were the only game in town on Wall St so they were able to rip people off. They are going to have to slash their fees no matter what, as more options have already been becoming available this year so Grayscale is now the over priced way to get into Bitcoin on Wall St. And I'm sure they care much more about maintaining their dominance than having slashing fees a bit. Any money they are spending on ETFs is to become the first one, not to stop all ETFs. As you say, it would be a huge advantage for them to become the first ETF and that is the best case scenario for them to maintain their dominant position in the market.

[Oshosondy]

Grayscale has added five new tokens which are (DeFi) tokens.

     

[Karartma1]

Why those? There are many betters tokens out there; Grayscale I'm starting to not understand you anymore! I mean what can a Livepeer Trust be good for? Better position your GBTC trust instead has the wolves are coming after ya.

[buwaytress]

Yep pretty much everyone in the 6m pipeline is loosing money. They're loosing, 1% in management fee, the discount over secondary, and 6m time value of money. Should've been trivial for Grayscale to see that secondary wouldn't be able to absorb the insane BTC10k of daily inflows, but you know those management fees are so hard to pass on. Oh well, hedge funds get screwed while retail enjoys a discount for next 6m i say it's a win/win

What. A. Cluster.

Those fees probably also accumulate or are periodic, so they're almost stuck in a sunken losses cycle. Already at a loss, too late to cut it off and it's not like it's even a lot as you point out. And now piling it on with "defi". Because Chainlink et al are SO decentralised.

Something tells me though that the managers aren't letting in on how bad it looks to the actual investors.

[fillippone]

A newly discovered bug, allowed an attacker to double deposit millions worth of FIL on an exchange and double trade them:

$4.6M in Filecoin ‘Double Deposited’ on Binance; Exploit Open on Other Exchanges

It’s not a “true” double-spend, but does it matter if funds can still be duplicated and traded on an exchange?

According to Filecoin miners at Filfox and FileStar, Binance processed a “double deposit” of FIL on Wednesday worth millions of dollars. This is not a true, on-chain double spend, but Binance credited the miners’ filecoin account twice after one deposit due to a “serious bug” in Filecoin’s remote procedure call (RPC) code.

The timing couldn’t be worse for Grayscale.

But you should expect this to happen when you deal with shitcoins, who are called shitcoins because actually are shitcoins.

[DooMAD]

Is it likely they have to get a regulatory sign-off every time they add a new asset?  Or, providing they can show "appropriate" backing, do they now have carte blanche to add any crapcoin they want at any time?

If it's the former, I also have to wonder what the regulators were thinking when they gave the thumbs up to such barely-established tokens.  Maybe I'm just not keeping up with the latest trends, but I've never heard of any of those newly added projects.

[JayJuanGee]

Is it likely they have to get a regulatory sign-off every time they add a new asset?  Or, providing they can show "appropriate" backing, do they now have carte blanche to add any crapcoin they want at any time?

If it's the former, I also have to wonder what the regulators were thinking when they gave the thumbs up to such barely-established tokens.  Maybe I'm just not keeping up with the latest trends, but I've never heard of any of those newly added projects.

I agree that it seems to be moving in the wrong direction to be both offering crap projects but also crap projects that are so far removed from name recognition that they should be obviously considered as something that should not be offered, unless you want to be considered as a total bullshitter.  Many of these financialization institutions (do they want to present themselves as innovators?) (whether we talking about Grayscale or otherwise) seem to want to be creating an impression that they are on the "cutting edge" and they are ahead of the curve, but if they go down such path too many times of the supposed "cutting edge" that ends up being a total package of smoke and mirrors bullshit, you would think that they would start to lose a decent amount of credibility in showing a pattern or inclination to continue to go in such direction.

[Charles-Tim]

I have just analyzed Livepeer, the coin should not be one to be included as it is seemed still shitty this time around. The price of the coin as of January 20 2021 was $1.8, at the time, the marketcap of the token was less than $35 million. But surprisingly and recently, the price has increased to over $19, with a marketcap of $414 million. With the recent increase, Grayscale should not even consider including it at all, the coin is not even among the first 100 ranked coin in marketcap. I think Grayscale should not even include any coin that is not ranked among the first 50 for now.

[fillippone]

The point is that they made huge money with bitcoins, riding their 30% premium.
Now that there is a flurry of new products putting pressure on their trust, they need to find new products to generate revenues for them. Only prpblem, this means fiddling with shitcoins.

[BitcoinivaX]

According to the news on March 22, Grayscale will unlock GBTC shares equivalent to about 6,554 BTC today, allowing them to enter the secondary market for free trading. Last week, GBTC shares equivalent to about 133 BTC were unlocked. Grayscale Daily Unlock Volume Index shows the amount of GBTC unlocked by Grayscale each day converted into BTC.

https://www.reddit.com/r/Bitcoin/comments/majyjw/grayscale_will_unlock_gbtc_shares_equivalent_to/

[fillippone]

According to the news on March 22, Grayscale will unlock GBTC shares equivalent to about 6,554 BTC today, allowing them to enter the secondary market for free trading. Last week, GBTC shares equivalent to about 133 BTC were unlocked. Grayscale Daily Unlock Volume Index shows the amount of GBTC unlocked by Grayscale each day converted into BTC.

https://www.reddit.com/r/Bitcoin/comments/majyjw/grayscale_will_unlock_gbtc_shares_equivalent_to/

Very interesting, but Wondering where you found such "Grayscale Daily Unlock Volume Index ".


I made a simple computation that yields similar results, on my spreadsheet.


Spreadsheet Link

I have one day offset thou, I would be interesting to make sure which version is correct.

 

[Jayt33]

After nine days of new investment closure, a buyback announcement, and some shady moves, still GBTC premium is still negative:

https://i.imgur.com/56tVTn8.png

I guess primary market whales are quite pissed off by this, and for sure you don't want to piss off your better clients.
Also given the fact there is a huge lockdown expiry in the coming months:

https://i.imgur.com/H55KWlY.png

First big outflow expected before the end of March, with massive outflow in April-July.
Dangerous times ahead.

Newbie here. I had invested in GBTC early this year in tax advantaged accounts in anticipation/hope to benefit from the post halving year bull run.
The problem is that I got in around January at a ~35% premium.

I'm now trying to read all I can about news on this discounted premium.

I'm still hopeful that 2021 will still see a major bullrun by end of year but I need to keep my conviction with GBTC.

Should I be buying even more GBTC now to average down my cost while increasing my position? Or is it anticipated that the discount will become even deeper and I should wait longer to purchase more?

How much could this growing premium discount hurt any BTC post halving gains in 2021?

Apologies for asking about the future but would like to learn yours and others opinions, thanks!

[fillippone]

You know I have been advocating the use of more liquid instruments to gain exposure to cryptocurrencies, well, at Hanetf they thought that by educating the investor about the differences between the available instruments you might think their product is superior to Grayscale.


So they went online with this brief description of how an ETP is different from a Trust and a Future.


Of course the conclusion do not surprise us at all:



Well, it's left to see what happens when the premium turns negative...


Edit:
Link to my ETP Thread:
ETC Group to launch bitcoin ETP on Deutsche Boerse

[acquafredda]

Good selling document to propose their own investment vehicles to the public after a nifty comparison, I have not read it all but I have saved it for later.
About Grayscale, now that GBTC is trading at a discount (around -4%) competition will probably get tougher.
But that is good for the market overall.

[DaRude]

After nine days of new investment closure, a buyback announcement, and some shady moves, still GBTC premium is still negative:



I guess primary market whales are quite pissed off by this, and for sure you don't want to piss off your better clients.
Also given the fact there is a huge lockdown expiry in the coming months:



First big outflow expected before the end of March, with massive outflow in April-July.
Dangerous times ahead.

Newbie here. I had invested in GBTC early this year in tax advantaged accounts in anticipation/hope to benefit from the post halving year bull run.
The problem is that I got in around January at a ~35% premium.

I'm now trying to read all I can about news on this discounted premium.

I'm still hopeful that 2021 will still see a major bullrun by end of year but I need to keep my conviction with GBTC.

Should I be buying even more GBTC now to average down my cost while increasing my position? Or is it anticipated that the discount will become even deeper and I should wait longer to purchase more?

How much could this growing premium discount hurt any BTC post halving gains in 2021?

Apologies for asking about the future but would like to learn yours and others opinions, thanks!

According to fillippone spreadsheet average premium in January was 14,34% with the max at 33% on only one day, unless you managed to buy everything in that one day in January (Jan 6th) i doubt you paid ~35% premium in January. Regardless, you have two exposures here, underlying price of BTC, and the premium/discount of your paper BTC vs real BTC. The two are not correlated (at least not directly), and price of BTC tends to swing much more than the premium of GBTC. In 2020 4th quarter GBTC acquired BTC159.830, these will need to be absorbed by the secondary GBTC market once trade restrictions are lifted in 2021Q2, this will likely suppress the premium and keep the discount going short term, long term the fund is closed and most likely won't open while secondary is trading at the discount. So discount should disappear once those coins are absorbed on the secondary.

tl;dr short term i expect discount to stay for few month but won't grow much more than what it is now, so if you expect to hodl for more than 6month buy now and enjoy the discount. But your main exposure is still to BTC price, so whether you should buy or not should largely depend how you expect price of BTC to perform. e.g. if BTC price goes up by 50% how much would you care if discount grows by another 2%? reverse is also true.   

PS: Another exposure to consider is that all of this goes out the window if US ETF is approved.

[acquafredda]

DaRude, a simple question for you: do you trade GBTC? I mean do you have any position? Otherwise I fail to get your investment tip.
I think the majority here would never put a single cent on GBTC as we are all capable to deal with the real thing.
Maybe it is too late in my day and I misread but I am either being curious or a bit picky.
 

[cryptoboss2020]

This is just the legimate pump and dump.
Coins Can Only Go one way!
You have to pump them!
Legit pump or not pump are pump.
Grayscale investors just invest and grayscale put the funds on the market and pump Up the bubble until it pops.


Thts what the Wall street do speculate and pump Up prices.
Bubble pops They buy Back cheap.

Every stocks are also just pump and dumps
So as Even real estate as gold price.
Just pump

[DaRude]

DaRude, a simple question for you: do you trade GBTC? I mean do you have any position? Otherwise I fail to get your investment tip.
I think the majority here would never put a single cent on GBTC as we are all capable to deal with the real thing.
Maybe it is too late in my day and I misread but I am either being curious or a bit picky.
 

Of course the best option is to run your own full node and hold the real thing in cold storage, but paper BTC has its niche. Realistically speaking, there are people who just don't trust themselves enough to hold the keys or get so anxious that it effects their every day lives. Try explaining to gramma that she needs to safely store her mnemonic backup to her offline cold storage somewhere safe and inaccessible to others yet accessible enough for the inheritance purposes. GBTC used to be my go to alternative recommendation in such cases (now i'm leaning towards Canadian ETFs BTCC/EBIT simply because of their lower mgmt fees). But i believe GBTC is still the only alternative for US retirement accounts. It's just a matter of options, if you're able to do so, buy the real thing, if not it's an alternative that might work for you.

GBTC is also a 1000 pound guerilla, a good indicator of markets interest in BTC if you know how to read it