For a little over 2 weeks, Bitcoin has been trading in a consistent channel. It needs to have a breakout above $51,800 to confirm the next upward leg.
GBTC follows BTC very consistently. The only difference is if there is a premium above Net Asset Value (NAV) or a discount. For the past 3+ years GBTC has been trading with a premium to NAV and sometimes as great as 50% (during FOMO). The past 6 months GBTC has been in the news (and on TV adds) with massive amounts of new money going into the trust at BTC then current prices via private placement by big fund managers. For a long time, GBTC has been the only game in town to invest via stock market in bitcoin assets exclusively. Due to institutional involvement, the premium has been greatly depleted as it should (same with other straight asset funds).
The negative premium (or discount - however you want to call it), is simply due to more investors wanting to get out than investors wanting to get in. Simple supply and demand. There will always be some kind of directional difference based on whether Bitcoin is generally heading up, or down because bitcoin trades 24/7 and GBTC is strictly stock market hours.
This all said, I can guarantee you one thing with GBTC..... the large investment firms will play the price swings like a fiddle and take advantage of times when there is a discount. They will scoop up all available if it starts getting out of wack (I say greater than 5% of NAV either way). Once this breaks out to the upside, the discount will rapidly disappear.
One other thing that GBTC will experience going forward that it really hasn't in the past, is quarterly lock ins. GBTC is up substantially in the first quarter of 2021. Large investment firms charge their clients a fee based on assets under management on a quarterly basis. They also send out quarterly reports that will compare how they are managing their clients assets to some kind of index. This is how they retain clients. Given we are going into the 3rd month of the quarter with very substantial returns and that GBTC has been in a level channel for the past 2 weeks, there will be some "locking in" of gains that they will also use to cash out for their quarterly fee. Then they will also do a re balancing of the portfolio to their desired "asset allocation" across asset classes.
This is nothing to fear but if you recognize it, you can also play it accordingly.
Good Luck
