TA Analyst Reveals Bitcoin Investment Trust (GBTC) and Bitcoin Prices Are Deviating
Drop in GBTC Premium May Be Reflective of Declining Interest in Bitcoin From Retail and Individual Traders
Cryptocurrency trader and technical analyst Eric Thies recently published a comparative chart on October 18th. The chart included details about both Bitcoin and Bitcoin Investment Trust, which lets investors invest in BTC through the public stock market. In his evaluation, Thies noted how the GBTC’s premium has dropped.
This drop is representative of the decline in interest that Bitcoin has experienced lately, which primarily involves retail investors and individual traders. However, there are still a significant number of investors collectively that are managing to keep BTC above $6,000.
Thies made a post on Twitter with a chart of his results, calling it “significant,” questioning why this issue isn’t the center of attention for the crypto conversation. He added,
“My take is that the two never deviate apart as such and there’s a ton of money about to be made. Only thing is I’m not versed enough in GBTC and the premiums, benefits, etc. It tells me two things are clear however: retail investor interest is extremely low and something or someone very powerful is holding actual BTC up.”
The shares of GBTC are worth $7.21 each, and it is equivalent to 0.001 BTC. Any shareholder of GBTC in the stock market has the ability to gather BTC as a result. There are some companies that function as institutions to hold the shares, like Grayscale Investments, which is a subsidiary of Digital Currency Group. The premium is a representation of how owners of GBTC can get benefits from deciding to use the shares towards BTC.
According to NewsBTC,
“Two major benefits of GBTC are taxation and security; investors do not have to file additional tax reports from their returns on exchanges and can leave GBTC to maintain BTC holdings safely on behalf of the clients.”
Historically, this premium has maintained a 20% to 30% premium, but the last several months of performance has brought down the premium to 10%, which means that investors will need to pay $7.21 for each BTC, rather than for 0.001 BTC.
Though it is clear that this is a sign of lessened retain demand, it’s also possible that the demand is decreasing in retail for BTC and GBTC alone. This could be due to the potential for Bitcoin ETFs to be approved soon, based on the filings of Cboe and VanEck. The alternative option would lead the public away from the current stock opportunity.
Still, consumers are probably waiting a little longer before Bitcoin ETFs are available, considering that their deadline for decisions aren’t until 2019. The SEC has a history of extending deadlines for the ETF filings they’ve received, based on the lack of incentive, so it could take even longer before these investment opportunities are made into a reality.