The shares of Grayscale Bitcoin Trust (GBTC) soared by more than 11 percent over the last 24 hours as the Bitcoin price keeps recording new gains. This is a major sign of growing demand among both institutional and retail investors.
A major buying opportunity
As reported by U.Today, Grayscale’s shares took an even bigger hit than Bitcoin, nosediving by more than 80 percent. Tom Lee, the prescient Fundstrat CEO, recently predicted that the recent crypto rally could result in even bigger profits for Grayscale.
The fund is able to sell its shares at a premium to scarcity. At the end of May, when Bitcoin was hovering above the $8,500 mark, GBTC was trading at more than 35 percent NAV premium, which means that the Bitcoin price was well above the $10,000 mark.
The premium is justified given that investors are not supposed to care about custody issues since they can buy BTC from a regulated stock exchange.
New meets old
Grayscale provides its customers with an opportunity to buy their shares instead of Bitcoin itself. Hence, mom-and-pop investors can treat the nascent asset class as a regular stock or ETF. Along with the CME futures exchange, it is responsible for the majority of Bitcoin trading volume that is driven by institutions.
Recently, the company also opened its Ethereum trust for retail investors after getting the green-light from FINRA.