Right now, the only way people with brokerage accounts, like IRAs for example, can invest in Bitcoin is with a closed-end fund called the Greyscale Bitcoin Investment Trust (ticker is GBTC). It typically trades at something like an 80% premium to its net asset value (NAV), as a result of there being so much demand from people who don’t have other options or want the liquidity associated with a public market security.
The premium is obviously ridiculous, but because of the disconnect between the fund and the underlying assets, so far it has endured. There is no arbitrage opportunity, at least not in a conventional sense. There is currently no mechanism by which to short-sell a Bitcoin.
A new entrant to the markets got some press this morning at Forbes. It’s going to be an index fund, albeit one that only accredited investors can access.
The HOLD 10, named for a common saying in crypto (and Bitcoin in particular) to hold one’s coins rather than sell, will be sold as a traditional security to accredited investors who must meet income or net worth minimums ($200,000 a year in income or $1 million net worth)…
What’s in the index?
As of September 26, the 10 coins the HOLD 10 contained based on the eligibility requirements and selection criteria, were Bitcoin, Ether, Ripple, Bitcoin Cash, Litecoin, Dash, NEO, Zcash, Monero and Ether Classic. Prices will be pulled from Bitfinex, Bitstamp, GDAX, Gemini, Kraken, Poloniex and Bittrex and weighted by volume.
You will see more of these things come out. There’s too much demand and curiosity to think this is going the other way. You need to listen to Patrick O’Shaughnessy’s Hash Power podcast episode right now if you haven’t yet.
I am not fully convinced on crypto, but I am fully convinced that enough other people are for it to matter.