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Bitcoin investment vehicle
In last month’s issue GBTC Discount Shrink, up-to-date status of Grayscale Bitcoin Trust, overview of its Spot ETF approval process, and Expected 2023 timeline. At that time, GBTC discount trading was reversing, rising 23.15% from a 30% low.
Since then, discounts have fallen further, reaching a record low of 34.5% this week. Perhaps this significant discount is the result of increased market sales of risk appetite and the market reaction to the LUNAUST market explosion. LUNA’s failure can be thought of as strengthening the Bitcoin case in the long run (the best will survive), but this example is an industry-wide government regulation, scrutiny, and investor protection effort. It is definitely used as a firepower to strengthen.
Despite the exact reason why GBTC discounts are low, the lack of Bitcoin Spot ETFs in the United States continues to affect GBTC holders with an additional 7.63% lower performance each year compared to Bitcoin.
GBTC has been trading at a discounted net asset value (NAV) since 2021.
Details of GBTC discount to NAV
GBTC returned -45.87% compared to -38.24% for BTC in the same time frame
GBTC looks like a great buy for individuals looking to step into funds and Bitcoin exposure. This is the same as buying Bitcoin for about $ 21,000 with a 2% annual management fee. It is clear that GBTC stocks traded in the secondary market do not have the self-sovereignty characteristics of native on-chain Bitcoin, but when trust is converted to ETFs, GBTC stocks surge compared to Bitcoin. To do.
Finally, there is MicroStrategy, one of the most prominent Bitcoin exposure methods in the last two years. The company owns 129,218 Bitcoins, with an average cost of $ 30,700, according to earnings announcements earlier this month. As a result of leveraged debt positions to buy Bitcoin and a year-to-date 36% drawdown of Bitcoin, the market is resetting the risk level of holding MicroStrategy’s debt and equity. MicroStrategy has declined 61.82% to date, but MicroStrategy’s Bitcoin holdings currently account for 154% of its market capitalization.
MSTR shares are trading -61.82% compared to -35.85% of BTC in the same time frame
The market capitalization of MSTR is more influenced than the price of Bitcoin
Buying MSTR today means the strong performance expected in the future at Bitcoin prices, but if that assumption is correct, MSTR shares will be medium- to long-term, given that the company can hardly be liquidated. This is one of the best ways to do it. Leverage Bitcoin positions to leverage free cash flow and access to public capital markets along with growing public brands.
