Bitcoin has gone through a mild decline throughout the past 24 hours, losing about $200 of its value. This represents a decrease of around 2.5 percent on the day. However, the Grayscale Bitcoin Trust (GBTC) currently trades at $11.44 per share, putting the price of Bitcoin upwards of $11,600. Can this be a signal that institutional interest is mounting up?
Shares of the Grayscale Bitcoin Investment Trust (GBTC) have seen a serious increase in their price throughout the past month. Unlike regular cryptocurrency exchanges where the price topped at around $8,900, GBTC saw it shares soar up to $11.44 at the time of this writing.
To put things in perspective, each share of GBTC represents exactly 0.00098247 BTC. Doing the simple math shows us that at an $11.44 valuation per share, 1 BTC is currently worth roughly around $11,644. This is a premium of around 37 percent compared to the prices at which Bitcoin is trading on regular cryptocurrency exchanges.
This could suggest that the interest in GBTC has surged over the past month, significantly increasing the value of each share.
The reasonable question here would be why? One of the reasons for this could be that institutional interest is creeping up.
Paying a 37 percent premium on GBTC, as well as an additional 2 percent annual fee, definitely raise some questions.
As touted by Grayscale, GBTC shares are supposed to be the very first publicly quoted securities which are solely invested in and deriving their value from the price of Bitcoin.
GBTC is allowing institutional investors to gain exposure to the price movement of the world’s leading cryptocurrency by using a traditional vehicle of investment. They don’t have to worry about storing, buying, or managing their private keys.
GBTC shares can also be held in some IRA and brokerage accounts. Perhaps that’s one of the reasons for which investors are seemingly more than happy to pay a large premium for it.
This was further reiterated back in February when the premium was almost as high by popular Bitcoin bull Tom Lee.
