ETFs, an acronym for exchange-traded funds, are familiar investment vehicles among traders and investors. Market trends tend to showcase positivity when innovation and familiarity are integrated. The trust factor serves as a crucial bridge. Hence, every cryptocurrency is aiming to launch its ETF. The idea is to boost recognition and fuel adoption across the world.
GBTC ETF by Grayscale is one of the first Bitcoin ETFs in the US. It stands for Grayscale Bitcoin Trust ETF and aims to provide exposure to Bitcoin in the market. It is identified as a key player because it has been serving the sphere since 2013. That counts for over a decade of experience in the crypto market.
| GBTC Overview | |
|---|---|
| Name | Grayscale Bitcoin Trust |
| Distribution Frequency | None |
| Ticker | GBTC |
| Trust Inception Date | 09/25/2013 |
| Primary Listing Market | NYSE ARCA |
| Public Quotation Date | 05/04/2015 |
| CUSIP | 389637109 |
| ETF Listing Date | 01/11/2024 |
| ISIN | US3896371099 |
| GBTC ETF Information | |
|---|---|
| Assets Under Management (Non-GAAP) | $14,139,900,109.19 |
| Base Currency | USD |
| Shares Outstanding | 291,230,100 |
| Sponsor | Grayscale Investments, LLC |
| Total Expense Ratio* | 1.50% |
| Index Provider | CoinDesk Indices, Inc. |
| Total Bitcoin in Trust | 232,333.23 |
| Fund Administrator | BNY |
| Bitcoin per Share | 0.00079777 |
| Digital Asset Custodian | Coinbase Custody Trust Company, LLC |
| Marketing Agent | Foreside Fund Services, LLC |
History of GBTC ETF
GBTC history dates back to September 2013, with a record in Bitcoin management that has continued to date. It was earlier accessible to accredited investors. GBTC, later in 2015, became publicly quoted under the symbol GBTC to allow investors to access Bitcoin from their brokerage accounts. Something that has stayed consistent throughout has been the Grayscale expertise. This includes the pivotal moment on January 11, 2024, when GBTC got uplisted to NYSE Arca as a Spot Bitcoin ETF.
The product facilitates the creation and redemption of shares based on the performance of Bitcoin. Values are tracked using the CoinDesk Bitcoin Price Index. GBTC liquidity remains strong or has been strong, since it surpassed $1 billion in assets under management in October 2017. Approval by the SEC gave it the much-needed push.
Why GBTC?
There are multiple reasons to trade GBTC. For starters, it is a publicly traded Bitcoin fund available for all retail and institutional investors and traders. This is an attractive opportunity; however, it is highly recommended that you conduct research before investing. Next, the Spot Bitcoin ETF product by Grayscale leverages its legacy, expertise, and liquidity in the best possible manner.
Legacy goes back to 2013 when GBTC was first launched. This gives it one of the longest operational histories as a publicly traded BTC fund. The principle is simply to rely on experience instead of chasing newcomers with higher risk. Crypto markets are still linked to risks, but experience plays a vital role when it comes to guidance.
Over a decade of experience operating Bitcoin investment vehicles has fetched the most awaited result. It is now regulated by the US SEC – Securities & Exchange Commission. Most importantly, a high level of activity provides investors the flexibility to manage their positions effectively. It is important to note that Coinbase Custody acts as the official custodian for Grayscale.
GBTC ETF Performance
| As of 13/08/2024 | |
|---|---|
| Net Asset Value (NAV) per Share | $48.55 |
| XBX Index Price | $60,860.43 |
| NAV per Share 1D Change ($) | $1.45 |
| Daily Volume (Shares)* | 3,714,258 |
| NAV per Share 1D Change (%) | 3.08% |
| Market Price 1D Change ($) | $1.40 |
| Market Price | $48.50 |
| Market Price 1D Change (%) | 2.97% |
| Premium / Discount (%) | -0.10% |
| GAAP AUM | $14,133,571,352.07 |
| 30D Median Bid/Ask Spread (%) | 0.02% |
| GAAP NAV per Share | $48.53 |
GBTC ETF Risks
Some risk factors are hard to ignore, and for all the right reasons, one might assume. These are competition, volatility, and outflows, among others.
- GBTC fees are higher as compared to other Spot Bitcoin ETFs in the market. The annual management fee is 1.50% associated with administration and safekeeping.
- One to keep an eye on GBTC outflows, for the factor, can trigger selling pressure coupled with a reduction in the value of returns. Outflows have reportedly been significant since its conversion to ETF.
- Bitcoin ETF competition is only gaining momentum, and more products will likely make their way into the market. Approval of Spot Ether ETF will add a pinch of spice to the dynamics.
- A direct association with BTC puts the ETF under the umbrella of extreme volatility. This can be understood by how Bitcoin has been moving in the last couple of days. It was last seen at $60,948.23 for a piece.
- The risk of loss, or the chances of losing funds, is high. In several instances, the digital asset has served the community a cold dish, leaving them two options: withdraw or hold.
These risk factors often put Grayscale Bitcoin Trust in a tough spot, with traders and investors conjuring to avoid it altogether. Nevertheless, it remains one of the most economical alternatives and the best way to diversify investment portfolios. GBTC eliminates the need to set up a separate account or link a wallet to other platforms solely to gain exposure to BTC. It is a convenient tool for everyone to access their investments on a regular platform.
Conclusion
Grayscale Bitcoin Trust certainly has limitations, but it is also one of the safest ways to explore the crypto market via Bitcoin. Investing in a cryptocurrency can be done directly. Still, the mechanism of GBTC is more convenient for every type of trader and investor, especially those just venturing into the market. Market trends fluctuate, and investment is subject to multiple factors that align with the overall crypto market. GBTC is a safe investment vehicle, but fund allocation should be done after thorough research.
Disclaimer: This article is only a reference point and not advice or a recommendation. The figures mentioned are subject to change depending on crypto market conditions.
For further guidance or details on investing in the Gray Bitcoin Trust ETF (GBTC), click here to visit the GBTC support website