Grayscale Bitcoin Trust BTC

Grayscale Bitcoin Trust (GBTC) is an investment product that tracks the market price of Bitcoin after deducting its associated management fees. Shares in the trust are the first securities to be invested exclusively in Bitcoin.

On 21 January 2020, the trust became a regulated entity of the US Securities and Exchange Commission (SEC). It's the first cryptocurrency investment instrument to receive the status of an SEC reporting company. Each share in the GBTC corresponds to 0.001 BTC, i.e., 1 BTC is equivalent to 1000 shares in GBTC.

Grayscale Bitcoin Trust was launched on 25 September 2013 under the name "The Bitcoin Investment Trust" as a private placement to accredited investors, later receiving FINRA approval for eligible shares to trade publicly. This means that investors have access to buy and sell public shares of the trust under the ticker symbol GBTC. Although the Trust is not an ETF per se, Grayscale says that it's designed along the same lines as popular commodity investment products like the SPDR Gold Trust, a physically-backed ETF.

GBTC is traded publicly on the OTCQX, an over-the-counter market, under the Alternative Reporting Standard for companies not required to register with the SEC. Its success reflects exactly that of Bitcoin since its value is derived exclusively from the cryptocurrency.

The safe storage of cryptocurrency is a well-known problem the world over, and the company assures investors that the Grayscale Bitcoin Trust's assets "are safeguarded by a robust security system that uses industry-leading security standards".

Trading options

While GBTC's movements largely mirror those of BTC, it is believed that GBTC is a leading indicator and somehow 'predicts' the future direction of BTC since GBTC is traded predominantly by professional and institutional players. It's also worth noting that, unlike Bitcoin, shares in the trust are less susceptible to manipulation by the crypto community.

How do I buy and sell the Grayscale Bitcoin Trust (GBTC)?

If you want to buy or sell ordinary shares in the Grayscale Bitcoin Trust (GBTC), you will need to have access to the stock markets. But the best way to trade it is through a broker or trading platform, such as MetaTrader or Libertex, where leverage can be used, and you can trade if the stock's value goes down.