GBTC - Portfolio Update - A Rumor On Two Names - Bitcoin And The Grayscale Bitcoin Trust | Benzinga
Deep Knowledge Investing originally recommended buying Bitcoin and the Grayscale Bitcoin Trust (OTC: GBTC) in late 2020 when Bitcoin was around half the current price. In June, when Blackrock, Fidelity, and several other huge institutional firms filed for Bitcoin ETFs (Exchange Traded Funds), we bought more and re-recommended the position.
Our thinking on that matter was that Blackrock and Fidelity were filing the ETF application because they thought it would be approved. We believe that if these firms succeeded in getting SEC approval for a Bitcoin spot ETF that the Grayscale application (currently in litigation) would also be approved. In that event, the Grayscale discount to net asset value (NAV) would collapse from 30% - 40% at the time to zero.
In addition, current Bitcoin issuance is around 900 coins a day. At current prices, that’s about $25 million of daily issuance. Blackrock has around $10 trillion under management. Even a 50bp (.5%) position would entail $50 billion of Bitcoin purchases from that firm alone. With a relatively fixed supply, and institutional demand coming, the only thing that can adjust is the price of Bitcoin.
As I write this, Bitcoin (CRYPTO: BTC) is up 5.5% on the day and GBTC is up ...