The Grayscale Bitcoin Trust (GBTC) has gained a staggering 63% in value in only 6 weeks since the start of Q4.
Today the value of GBTC is $17.96, up from $11 ion 1 October, 2020, as the institutional grade investment fund continues to accumulate BTC.
According to Grayscale’s announcement on Twitter at close on Friday 13, November, The Bitcoin fund is now worth $8.239 billion. Meaning Grayscale now owns over 506,000 BTC – about 2.78% of Bitcoin’s circulating supply.
What is Grayscale Bitcoin Trust (GBTC)?
GBTC trades on the Toronto Stock Exchange, and is the biggest BTC only investment fund.
The fund enables investors to gain exposure to Bitcoin in the form of a security, without having to worry about self-custodying BTC. As well as this, it also allows investors a way to get around the regulatory problems some come up against with Bitcoin.
There are 531,616,100 GBTC shares and each share represents BTC 0.00095262, which at today’s BTC to USD price is worth $15.46, so investors in GBTC do pay a slight premium. There’s also a 2% annual fee.
Grayscale has been aggressively buying Bitcoin this year as it looks to grow its AUM. Grayscale CEO Barry Silbert “warned” the Bitcoin community back in Q2 to look out for Grayscale’s aggressive buying, and the BTC fund has lived up to its promise.
In the weeks after the Bitcoin halving, when the new supply took a 50% cut to 900 new BTC a day, Grayscale were known to have acquired more than 1.5 times the amount of newly minted BTC.
Since the end of 2019, Grayscale’s BTC holdings are up more than double, and the GBTC AUM is up almost 1000% than from $830 million.
And this last week alone, Grayscale bought 15,114 bitcoins, which Grayscle Managing Director, Michael Sonnehnshein declared it to be the largest capital raise week ever for the Bitcoin Trust.
Investors Seem Disinterested In Grayscale’s Bitcoin Cash Fund, However
While The Grayscale Bitcoin Fund (GBTC) is growing from strength to strength, Grayscale’s BCash Fund (BCHG) is losing value.
The BCHG assets under management has fallen $1.6 million since the announcement that BCH would be forking the blockchain.
Ironically, however, it appears that Grayscale has added to its holdings of BCHG shares since the fork. But the lack of interest or faith from investors has seen the fund decrease to just under $47 million AUM.
It’s not just Grayscale Bitcoin Cash investors that appear to be losing faith in BCash, as more than $300 million worth of BCH has been sent to exchanges since the announcement of the fork in October.
Grayscale Leading The Way
Grayscale has had a phenomenal growth rate in 2020. And at times when almost every other company or fund is experiencing their worst ever period.
Grayscale Bitcoin Trust (GBTC) has grown from a relatively small cap fund under $1 billion AUM, to over $8 billion AUM in little under a year.
The success of GBTC highlights the hunger from institutional grade investors in BTC as they look for ways to gain exposure to the leading cryptocurrency before regulations finally change.
At the rate Grayscale and Bitcoin price is growing, who would bet against Grayscale being a $100 billion asset by the end of 2021?
Probably the only thing that could slow it down is another fund launching on a bigger more accessible exchange.