Just asking to the community as I am not able to find the relevant information.
I am not sure if Greyscale deals into physical bitcoin. Their funds are just linked to the price of its underlying assets. Am I correct?
If the above is true, then all these figures don't make any sense because these are not flowing into the market. Not really helping in increasing market liquidity.
Can someone shed more light on it? I may be wrong!
Didn't dig much into it, but the way I understand it, Grayscale does actually buy and hold bitcoin(they've been buying a crap ton of mined bitcoin in the past few months), but people don't buy actual bitcoin through their bitcoin trust(GBTC).
Thanks for the information! In that case, it works like an ETF (Exchange traded fund) where the custodian buys bitcoin from the market and sells to the market in form of shares based on the value of the underlying asset. Even though the bitcoins are getting centralized and getting locked under a single location, but it still provides liquidity to the market. So the market is getting benefited by the actions of Greyscale. So if their numbers are increasing, it is safe to assume that the value of their holding is also increase - so there's correlation!
I remember, back in 2017 everyone went crazy when CME first announced their bitcoin ETF. But later we found that CME doesn't deal in actual bitcoins but just plays based on its market price. But since greyscale is actually buying bitcoins from the market - may be considered as a bullish signal.
