Bitcoin trading above $4000 in stock market
Yes you read that right, bitcoin is trading above $4k in the stock market.
Hold on, $4k? Stock market? Do you mean crypto market maybe?
No, let me explain.
Bitcoin can be traded on stock market just like gold or any other commodity can: via ETF's: Exchange Traded Funds. The Bitcoin Investment Trust (BIT) is one of these. On their side they explain:
" The Bitcoin Investment Trust is designed for sophisticated investors looking for exposure to bitcoin in a simple investment asset. The BIT addresses the confusing and cumbersome experience of buying, storing and safekeeping large quantities of bitcoins as an investment."
So basically it is an investment vehicle that tracks the market value of bitcoin.
OK but how do you get to the price of above 4K?
Each share of BIT is called a GBTC and is worth 10% of a bitcoin. normally that would mean that a share should be priced about $274 per share, as Bitcoin is trading around $2740 at the time of writing this post. However currently these shares are traded at a price of $412.50 as you can see in the graph below.
These shares are thus traded at a massive premium. The reason for that are provided by our friends from Cointelegraph.
"The three most obvious driving factors of Bitcoin demand in public stock markets are the ability of Bitcoin to scale, increased regulation of Bitcoin by overseas markets and increased demand towards Bitcoin from institutional investors such as Fidelity."
Big demand thus for Bitcoin. Got to ask yourself though, is GBTC really a tracker or is it a predictor?
Stay tuned for more!
Sources:
https://cointelegraph.com/news/bitcoin-is-trading-at-extreme-premium-in-stock-market
http://bitcoinist.com/gbtc-bitcoin-investment-fund-live/
www.google.com
Great information here. I never knew bitcoin ETF existed
Glad to be of help, cheers!
I love it. Old rich people pushing up the price of something they dont even understand
Thanks, haha yes but they have all the comfort we as crypto traders don't have ;) By the way i see our interests are pretty similar looking at your posts, will follow you going forward. Cheers!
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STOPA pretty good buy signal aye?
I wouldnt mind seeing this for other cryptos too!