While the whole world is waiting for a Bitcoin ETF, one is already available!
While the whole world is looking at the Bitcoin ETF from the Winkelvoss brothers, there is already one available from Grayscale Investment. But there's a downside, at the moment you have to pay double the Bitcoin price to buy the ETF. Read on to find out why.
The advantage is that the ETF increased by 248% in May, compared with 72% for Bitcoin.
The advantage is that the ETF increased by 248% in May, compared with 72% for Bitcoin. And the ETF is user-friendly to buy than the Bitcoin. On the other hand, Bitcoin performed better than the ETF in 2 of the last 3 months. The sharp rise in May also caused a increase of the premium on the ETF.
The Bitcoin ETF of Grayscale Investments has been in existence since 2015. Since its creation, 1.7 million Bitcoins have been in the fund. But it is operational difficult to buy, sell and maintain Bitcoins for an ETF. It is also difficult and expensive to insure them. As a result, the number of Bitcoins remains presumably 1.7 million.
This creates the necessary liquidity problems. When the demand for this ETF is high, as in May, the premium increases on top of the current value. When demand drops, this premium may decrease again. The price of the Bitcoin ETF may rise faster than the price of 1 BTC, as can be seen in the figure below.
The low liquidity makes it difficult to buy or sell the Bitcoin ETF at is real price. You can already invest in a Bitcoin ETF, but it currently has a price tag. If demand decreases, the premium may fall. With an extremely low demand, it is possible to buy the Bitcoin ETF with a discount.
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UnknowCrypto
nice article you posted here, following now...sharing it also with others...
Thanks for the support @hiroyamagishi, I appreciate it!
Nice. I have actually been commenting on teh technicals of GBTC and how that ETF will "likely" lead the price of "actual" bitcoin. I'm also tracking BTSC.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=btsc&x=36&y=19&time=18&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=15
That's a short term sell signal on BTSC so I figger it will see the sub .05 target I spewed about in my first blog about it here.
Thanks for the information @joejustjoe, very useful. I'm going to read it.
I linked a few people to this blog as you went more indepth on teh particulars of GBTC via your blog. I'm simply following pricing as driven by sentiment. Hopefully more learn about GBTC as it is a much better way to trade bitcoin then "actual" bitcoin. Longer term both go looower. I'm still trying to prove to myself that GBTC "leads" teh bitcoin price both up and down. Right now it looks like actual bitcoin is it's own animal. But if GBTC was so "obviously" mispriced and it holds all of those coins...I wouldn't be "shocked!" to see a major gapdown move in actual bitcoin soon.
Thanks @joejustjoe for sharing and also your feedback. It helps me a lot. Interesting opinion and i am going to check it out!
Thanks for the info, I think there is a small Bitcoin ETF in Stockholm Sweden as well. I don't think many have heard of it :)
Yes it is. And that one is only going up so far.
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