According to Grayscale Digital’s official website data, the Grayscale Bitcoin Trust (GBTC, Bitcoin Trust Fund) has so far increased averaged 199.24% in the past 12 months, while Bitcoin‘s spot price soared 143.55%. This article will focus on crypto funds that are higher than Bitcoin.
Similar to the characteristics of traditional trust funds, cryptocurrency trust funds are issued by specialized investment institutions in the form of contracts or companies, issuing fund vouchers, raising investor funds, and handing them over to investment institutions for investment in accordance with the principle of the asset portfolio.
Investors share revenue based on the proportion held and bear the corresponding risks.
The largest trust fund in the encryption market today is the Grayscale Bitcoin Trust (GBTC, Bitcoin Trust Fund) of cryptocurrency investment firm Grayscale Digital. Grayscale Digital was founded in 2013 by the investment group Digital Currency Group.
On September 25 of the same year, it established the first bitcoin trust fund GBTC on the market. The fund’s asset management scale is now $2 billion. In addition, Grayscale Digital has created eight single asset trusts, including Bitcoin Cash Trust, Ethereum Trust, Ethereum Classic Trust, Horizen Trust, Stellar Trust, Lumens Trust, XRP Trust, Zcash Trust, and five types of currencies. The multi-asset trust fund, Grayscale Digital Large Cap Fund.
So what is the difference between direct investment in digital currency and purchase of trust funds? Take the Bitcoin Trust Fund as an example (other trust funds are the same):
Traditional investors who are unfamiliar with digital currency can enter through the trust fund without having to redeem and store digital currency.
You will receive 0.00097368 bitcoins for a copy of GBTC and a price of $9.28 for a GBTC (price on October 16, 2019). According to the bitcoin market price of $ 8,175.10, the value of 0.00097368 bitcoins is $7.60. Therefore, the premium of the two is 32%, and when the historical premium is the highest, it is as high as 85%, which brings a lot of arbitrage space.
Because GBTC’s price fluctuations in the secondary market, the yields of the two are also different, but from the data of OTCmarket, the positive rate of return of GBTC is always higher than the positive rate of return of bitcoin.