Are you an investor looking for something good to put your money in? Have you been in cryptocurrency before? Or perhaps you are still active in it. If so, then you have probably tested the water in Bitcoins, but due to the constant fluctuation of prices, you are thinking about retreating and searching for another avenue.
If all of the above are true for you, then know that you are not alone. A lot of investors out there are drawing back mainly because of the extreme and unpredictable movements in this particular market. The good news, though, is you can still stick with Bitcoin through the so-called Grayscale Bitcoin Trust.
What Is It Exactly?
Grayscale Bitcoin Trust is one of the digital currency products that can be bought and sold by individual investors. With this, they can use their own brokerage accounts. This option is attracting a lot of people particularly those that are very much interested in digital assets but still want to stick with the stock market.
Obviously, from the term itself, Grayscale Bitcoin Trust, this product is associated with the most popular virtual cash these days (Bitcoin). It owns this particular asset. In fact, it is the only way for any individual to trade with Bitcoin on the stock market. This then requires investors to pay a certain premium.
How Does It Work?
In order for you to invest in GBTC, you will have to pool a certain amount of money that you will use to buy a certain percentage of the trust’s shares. You will then be given a contract that will serve as proof of your ownership of shares.
With this particular trust, one share is equivalent to 1/1000th a Bitcoin. For example, if you purchase 10,000 shares, then you will have about 10 Bitcoins under your name. All of the details shall be stated in your contract with the trust company. You have to take note, though, that the number of BTC that you own, as well as that of your shares, may change. You will also be charged an annual fee of 2%. This amount will go to the trust.
What You Need to Know About the GBTC Premium
In general, going for GBTC is a good option for investors, including those who are just starting out in the market. You have to be prepared for the premiums, though, because they can be extreme, depending on the demand and supply. If there seems to be a high demand and the supply is quite limited, then you can expect high premiums. But don’t let this discourage you if you really want to be part of it, especially if the premium is low at the time you decide to sign up.
Reasons to Consider GBTC
Just like anything in the financial market, GBTC has its own flaws as well. But who knows, investing in it might be the break that you have been waiting for. GBTC is immediate and there is no limit to your spending unlike the other cryptocurrency products available. Although there were times when this trust has shown inconsistencies, it could still be profitable for you as long as you wait for the right time to dive in.