The goal of the Grayscale fund is to facilitate crypto investment for all in the United States, which is legally regulated by the SEC.
The Grayscale Fund provides financial means for new investors to enter the cryptocurrency market in the most convenient way. Here are some benefits:
The founder and CEO of Digital Currency Group (DCG) is Barry Silbert. It is known that DCG is the parent company of Grayscale, Coindesk, TradeBlock, etc.
Prior to that, Barry was the founder of SecondMarket, which was later acquired by NASDAQ in 2015. As can be seen, Grayscale is led by an experienced founder who currently manages many leading companies related to digital assets.
Barry rarely uses Twitter, but every time Barry posts a tweet, it gets a lot of attention. Barry started a Bitcoin hedge fund in 2013 with $2 million in initial capital, allowing him to single-handedly shape the early crypto market.
Recently, because the collapse of FTX implicated Genesis Trading, a subsidiary of Genesis Global also owned by DCG, Barry was sued and criticized by the CEO of Gemini on social media platforms. Now, the Grayscale Review article will learn about how GBTC works.
The general operation process of GBTC can be encapsulated in the following steps:
Simply put, a trader who owns GBTC shares indirectly owns Bitcoin. GBTC makes a profit from the collection of the fund’s management fees. In addition, another source of income can come from cryptocurrency trading. However, this year, GBTC continuously increased the proportion without any move to sell off assets.
On the market today, GBTC is the only stock that calls for investment through buying Bitcoin. Thus giving absolute advantage in the field of activity. This makes it possible for GBTC to charge a higher fee than the common ground. At the same time, GBTC is also favored by major financial institutions in investing in Bitcoin through third parties.
No one in the world gives anything to anyone. And the funds are not free for investors either. Grayscale Investment Trust charges an annual management fee of 2% of assets. This is a relatively high management fee to pay. By comparison, gold ETFs charge only 0.25% per year to invest in gold stored in vaults. You may not have thought to preserve Bitcoin is much more difficult than preserving gold bullion.
Although there are now competitors emerging, Grayscale has little reason to cut fees. In 2020, the price of Bitcoin skyrocketed from 5,000 to 20,000 or nearly 400%; it is difficult for anyone to care about the small 2%. Certainly, owning a Bitcoin Investment Trust is a lot easier than buying digital currency on an online crypto exchange. GBTC offers this convenience with a premium price tag.
Currently, Grayscale has 14 trusts and 4 investment funds, 3 of which invest in cryptocurrencies. Grayscale’s key product, the trust – Grayscale Bitcoin Trust, was first launched in September 2013 under the abbreviated name GBTC. US users can invest in Bitcoin directly on the stock market through the purchase of GBTC.
That is, retail investors buy shares of a Bitcoin trust fund (specifically with the token GBTC). The stock price will be close to the Bitcoin price on the crypto exchange.
Through GBTC, investors own part of the shares of the Bitcoin pool. Literally, they hold stocks, not actual Bitcoins. Besides Bitcoin Trust, there are many other Trusts with the same operating principle as Bitcoin Trust (There are currently 14 Trusts in all – we will explain in detail below). Overall, the products revolve around popular crypto assets (top 100 by capitalization). Because these assets guarantee credibility, as well as low volatility.
In addition, Grayscale Investments also has a fund called Grayscale Future of Finance (symbol: GFOF) which is an ETF that seeks to invest in companies and technologies that shape the “future of finance.”
Grayscale is currently investing in 14 different coins (as of January 30, 2023). Each coin is a separate fund and has been carefully selected by Grayscale Investments according to many criteria.
In addition to well-known coins such as BTC, and ETH…, Grayscale also invests in a number of projects such as:
With the explosion of DeFi in 2021, it is not surprising that Grayscale also participates in this lucrative “piece of cake” with the Grayscale® Decentralized Finance Fund. When joining this fund, users only need to buy a certificate of a fund to be able to participate in investing in all Defi coins in the portfolio.
This fund was launched by Grayscale in July 2021, specializing in investing in the most prominent and potential coins of the Defi field, including:
GBTC is a stock created based on the value of Bitcoin. It possesses the characteristics of a mixture of stocks and virtual currencies. From there, it brings outstanding advantages that an asset class does not have. The consideration of adding GBTC to the portfolio depends on the taste of each different trader.
Through the above article, Coincu hopes to provide general knowledge about GBTC to readers. If you have any questions or comments. Readers do not hesitate to leave them below. Hopefully the Grayscale Review article has helped you understand more about the project.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Harold
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