Grayscale Bitcoin Trust Surges 300%, Eclipses Oil & Tech ETFs
While Bitcoin price itself has begun the inevitable correction, dropping almost 17% since its recent high, investment funds for the asset are still hot potatoes. Grayscale Bitcoin Trust (GBTC) is a prime example as institutional interest has surged more than the asset itself.
Despite Bitcoin Price Correction, GBTC Investors “Hungry”
Bitcoin appears to be still in correction mode. It did climb back up to reach $12,400 for a few hours yesterday but has since dropped back to support at around $11,500. The lowest point in the recent pullback was $10,300, a drop of 25% from its $13,800 high. Many are expecting a 30% plus decline which would send BTC back into the mid $9,000s or lower.
Regardless of what the crypto asset itself does, institutional investors are hungry for more. Grayscale’s Bitcoin Trust (GBTC) has been performing exceptionally well since February and has surged over 300% according to Forbes.
The report added that the over the counter bitcoin backed security is trading at around $14 per share, up from $3.84 five months ago. In the same period bitcoin itself has gained over 220%. The discrepancy can be attributed to the increased premiums that institutional investors are charged as they are prevented from directly holding the asset.
GBTC Has “Destroyed” Gold, Oil & Tech ETFs
According to the editor of Forbes Dividend Investor newsletter, John Dobosz, the GBTC has destroyed other investments such as gold, oil, the S&P 500 and various tech ETFs.
“The total gain since that time for the GBTC, which tracks bitcoin pretty accurately, is up 341%. What comes in second best? You would have been okay with oil, even though oil has eaten dust and other particles in the last few weeks. Oil is up 12.8%.”
He added that the S&P 500 is up 8.5%, gold is up 7.7%, the iShares MSCI Emerging Markets ETF is up 1.4%, the Invesco QQQ for tech companies is up a lowly 1.7%, and the US dollar is up just 1%.
The report continued to state that the reason for this monumental performance could be the fund is the only publicly quoted US-based bitcoin investment product, which holds more than 1.2% of the total supply of BTC.
Grayscale Has $2.7 Billion of “Crypto” AUM
Grayscale has invested in other crypto assets including Ethereum, Bitcoin Cash, Litecoin, Stellar, Ethereum Classic, XRP and Zcash with total assets under management of $2.7 billion.
6/28/19 UPDATE: Holdings per share, net assets under management and digital assets per share for our investment products.
Total AUM: $2.7 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/uMC6VFMfMm
— Grayscale (@GrayscaleInvest) June 28, 2019
The fund is currently at an all-time high which is likely to continue when bitcoin resumes its bullish momentum. At the time of writing, BTC was trading at 00 and heading lower as the weekend begins. Further accumulation is likely to occur if BTC drops below five figures and this will drive the next wave of the uptrend.
Will institutional investment boost Bitcoin price even further? Add your thoughts below.
Images by Shutterstock, Grayscale Investments
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Martin Young, Khareem Sudlow
