Thoughts on GBTC

As we should be coming into a crypto bottom it's a great time to think about one's exposure, including in brokerage accounts and retirement counts, within measure of course. While there are ways of getting real cryptos into a retirement account, the legal framework for doing so in the US is a lot of effort. And, there still is no ETF approved by the SEC. One options is Greyscale Investment's Bitcoin Trust (symbol GBTC).

As I consider Bitcoin coming into a potential bottom at $4600, if not before, I also see GBTC coming into a similar bottom in the $5-$7 region. And, I believe that that GBTC will eventually retake its $38 high (split adjusted), and eventually moving beyond.

One of the considerations in GBTC has always been its premium over Net Asset Value (NAV). This asset is a slave to sentiment, and when in favor. investors have bid it up beyond the value of the bitcoin contained within. I keep a Premium chart for my subscribers that shows the premium real time. Fortunately, as the bear market has bled the value out of cryptos, so has GBTC's premium. As you see from the chart it it reached a premium of over 90% at one point (1.90 on my premium chart). As of close today, this premium is now only 4%. This gives GBTC much less risk of sudden deflation if a real ETF is approved.

(open in new tab to see charts larger)

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