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How does the Grayscale Bitcoin Trust work?

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The Grayscale Bitcoin Trust (GBTC) is a financial product that allows you to invest in digital currencies.

These are publicly traded stocks Bitcoin Trust Grayscale invested exclusively in bitcoin reflecting the price.

The trust is approved by the SEC and therefore offers exposure to the BTC market even to investors who cannot invest in unregulated markets or assets.

GBTC debuted on September 25, 2013 under the name of Bitcoin Investment Trust, as a private placement for accredited investors, and subsequently received FINRA approval for securities eligible for public trading.

This Trust not an ETFAlthough the company claims that it is modeled similarly to commodity investment products like the SPDR Gold Trust, that is, as if it were an ETF with a physical underlying.

GBTC is listed in the market OTCQX from sale free and has a capitalization of more than $ 2.6 billion.

In addition, it requires a minimum investment of $ 50,000 and charges an annual rate of 2.0% that accumulates daily.

One of its main advantages, in addition to SEC approval, is the safe custody of BTC, because it is the shares and not the bitcoin that are bought, sold and traded.

These are stored in a secure system that uses high security standards that are also secured.

GBTC is available like any other US security. And it can also be traded through a brokerage firm.

However, there has been some criticism regarding the payment of high premiums and commissions, but since it is currently the only fund of its kind in the market, investors who want to take advantage of it must pay a high fee.

As of September 2018, GBTC shares were trading at a value 20% higher than the value of BTC in the Trust, since their prices are more related to the supply / demand ratio of the stock markets than to the value of the underlying asset.

Even in the last few weeks, the GBTC has a market price higher than the BTC valueThis is probably due to the fact that it is the only security of its kind available.

Trading volumes recently hovered around $ 8 million per day, so it is not a particularly large market. CME bitcoin futures volumesThey are on average much higher, for example, while Bakkt futures volumes are only slightly higher.



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