Crypto, Blockchain, DLT

[gfp927z]

>>> 4. Investing through a brokerage firm.



https://www.thestreet.com/story/14229944/5/bitcoin-s-humongous-returns-are-luring-mainstream-investors-here-s-what-you-need-to-know.html


For investors wanting to avoid the risks and hassle of setting up digital wallets, they can invest in bitcoin indirectly through Bitcoin Investment Trust (GBTC) in the OTC market. GBTC is a bitcoin-based fund that acts like an ETF, whose shares can be bought and sold through traditional brokerage firms. Each share represents about one-tenth of a bitcoin. But the convenience comes at a steep price: The fund has been wildly popular, which has caused shares to soar to the point where a share is now priced about 73% higher than the value of the underlying bitcoin. (GBTC recently traded at $357, which values a single bitcoin at about $3,570. But Bitcoin recently traded at $2,060.88). Also, GBTC charges a 2% management fee on top of that.

The frothy premium may not be an immediate concern for shareholders, since GBTC is the only bitcoin ETF available. However, if the Winklevoss Brothers, famous for their controversial lawsuit over their role in Facebook's start, ever get their Winklevoss Bitcoin ETF approved, it could be a different ballgame, and GBTC values could plunge. (The SEC turned down the Winklevoss ETF earlier this year over lack of regulation, but agreed to reconsider it later). "As soon as there's more products, more liquidity and more choice, the premium will disappear," said Hayter. <<<