Something is unclear about your last sentence.
Who wasn't confident about whether GBTC was not an open scam? You? Your friend called "someone?" or somebody else?
Dang, my broken English..
I wasn’t able to explain (in Italian) to that friend of mine how it is possible GBTC is trading at 20%+ discount to NAV without anyone closing this “arbitrage”.
My explanation on why this is not an “arbitrage” in the first place were enough to dismiss all this multimillionaire market as “scam”.
I still do not get what you are saying exactly.
I am presuming that within that conversation you are the probitcoin person, and you are trying to explain in such a way that attempts to shed various good lights upon bitcoin.
Your friend (let's call him FoF - Friend of Fillippone) is somewhat of a typical sceptic, so maybe any kind of attempt that you attempt to make, he spins it in a way in which he cannot get over that some shennanigans might be going on... so maybe in that sense, he may well not even be trying very hard to "get bitcoin."
I do consider that frequently there are some weird things going on in bitcoin that are not really easy to explain, and maybe the persistent 20% plus discount with GBTC remains one of those difficult to explain phenomenons.
One thing that we know is that GBTC was amongst the ONLY official products that were available for some of the traditional funds or even individuals who have to comply with self-directed official sources. That somewhat monopoly existed for more than 5 years, and still might even persist in some ways for folks trying to get spot exposure to BTC through their official custodian bitcoin channels, and so in that regard, GBTC/Grayscale had acquired more than 600k BTC over the past more than 7 years by having a kind of monopoly position, so even like you had mentioned on an ongoing basis, their ongoingly sucking out of a fee of 2% might justify that level of deviation from spot BTC price, and so the greater than 2% deviation from NAV does seem justifiable or rational.
I don't really know how to explain the difference or even claim to really understand some of the financial products that are available except maybe to say that the market is ongoingly punishing GBTC once they transitioned into a competitive spot.. and GBTC is no longer competitive, but GBTC refuse to further reduce their fees.
We do know that rich peeps (whales) will also manipulate existing situations, dynamics or momentum for as long as they can to cause various kinds of questions and doubt about the value of the underlying (which also can cause normies/retail to act in irrational ways in that the manipulators can attempt to take advantage of such persistent irrationalities/arbitrage opportunities, so sure maybe there is some manipulation going on, too...
It may well be the case that some BIG players want to cause GBTC to suffer... Does it even matter? It seems that at some point, the arb difference is going to revert to getting back to something like 2% (or if there might be some other liquidity issues that might justify a greater than 2% persistence in difference) unless we believe that such ongoing manipulation of GBTC could cause the whole GBTC fund to fail (which does not even seem that likely, but hey anything could happen, no?), and if that might be part of the goal of any kind of ongoing seemingly manipulation that might be taking place and seems to be persisting in a kind of irrational ongoing status.
For sure, you might already recognize that there is some kind of futility to try to talk rationally with FoF, too. there are a lot of things going on in bitcoin besides a persistent irrational arbitrage opportunity of a BTC fund that has more than 600k BTC.
Does FoF just feel inclined to believe that the whole of BTC is a kind of fraud / scam? Is FoF too smart for his own good and he does not even know the difference between bitcoin and various shitcoins? Is FoF ongoingly framing bitcoin as if it were even close to mature as an asset class, when the fact of the matter remains that bitcoin likely has less than 1% world-wide adoption, even though bitcoin is being considered more and more within traditional financial circles and hoarded by the traditional financial players who seem to get it, while at the same time a whole hell of a lot of peeps within traditional financial circles still do not get bitcoin, and they seem to be "not getting it" on purpose..
So we have some traditional players hoarding bitcoin, and we have some retail (likely OGs who get bitcoin) who are hoarding bitcoin, and perhaps some of the hoarding of bitcoin and some of the refusal of some HODLers to get shaken from their bitcoin causes bitcoin to seem BIGGer than it really is.. and seems like a scam or a religion.. or for those of us HODLing bitcoin waiting for all the newbies/normies to come into bitcoin, and sure, the newbies/normies can remain reluctant to come in to their own ongoing disadvantage and likely peril. There's ONLY so much that can be done to onboard these kinds of folks who are ongoingly coming around to bitcoin.. little by little by little by little.. but I still refuse to concede that adoption in bitcoin if very high, even if there might be some pockets of cohorts that are identified to have higher levels of adoption that might even be getting into the double digit arenas (pockets of course).
Perhaps FoF is one of those who are purposefully NOT getting bitcoin because he is smarter than everyone else to his own disadvantage? Yeah, go ahead FoF, and wait another one or two cycles for BTC to get further adoption with a likely larger variety of competitive financial products that are going to remove so many of the persistent and outrageous arbitrage opportunities, and at that that point, you still are going to likely advantage from bitcoin continuing to have UPside, with fewer downside risks. The seemingly outrageous ongoing arb opportunities likely continues to show how immature the bitcoin space/market continues to be, and should demonstrate to a lot of peeps, including FoF that there remain opportunities in bitcoin that relate to its very immature status.. and sure you can wait for bitcoin to grow up, which it likely will continue to grow up, but it is going up another 10x to 100x or even 1,000x in that time that you are waiting, and then at that point, BTC will be the mature asset that you want it to be. nice and stable, and maybe ONLY another 10x to go up after it goes up 1,000x from here.
Many of us who have been in bitcoin a long time have heard these various scam/manipulation/existence of irrationalities arguments from smarter than us people, and many of those smart people seem to be too smart for their own good (and maybe FoF fits in such groupening?), because the various crazy irrationalities/manipulations/scams that they are pointing out, to the extent that they understand the difference between bitcoin and shitcoins, remains potential red flags about possibly lowering your level of exposure to bitcoin to maybe somewhere lower on the 1% to 25% starting allocation range.. .and surely there is likely a decent amount of confidence and bullishness to get higher on the BTC allocation range such as within the higher 10% to 25% range, so those redflags about scams/manipulation/existence of irrationalities might be telling them to start with a lower level allocation into BTC, but many times, instead of starting with a lower allocation level into BTC these guys decide to stay on zero% and to wait it out.. and maybe get in later, perhaps when some of the irrationalities become fewer?.. which surely seems the wrong move and in the next 4-10 years, they will likely recognize their mistake of failing/refusing to get off zero.. even if they may well have pointed out the actual existence and persistence of some valid ongoing risks/concerns about various scams/manipulations/irrationalities that continue to exist in bitcoinlandia.
