Crypto Power Play Grayscale Bitcoin Trust Makes Nvidia Look Like Yesterday’s Chip with 220% Gains This Year

Grayscale Bitcoin Trust Leaves Nvidia in the Dust With 220% Gain in 2021

Contrarian investors who had the guts to dive into Grayscale Investment’s bitcoin trust (GBTC) back in January of this year, when the crypto market was engulfed in gloom and doom, are now raising their champagne glasses in celebration.

Just picture it: GBTC shares skyrocketed an astonishing 220% to $26.79, according to the trusty charting platform TradingView. And hold your horses, because the best-performing stock on the S&P 500, Nvidia Corp (NVDA), also made a mind-boggling leap of 198%, while the entire index recorded a mere 9% gain. Meanwhile, our beloved Bitcoin (BTC) has doubled in value, lounging comfortably at $35,000, while traditional government bonds crashed like a bungee jumper without a rope.

Now, before we go any further, let’s make something clear: we’re not talking about just any bitcoin trust here. Grayscale’s GBTC is the real deal, baby, and it’s causing quite a stir in the market. Some expect the U.S. Securities and Exchange Commission (SEC) to give it the green light to convert into an open-ended exchange-traded fund (ETF) that invests solely in bitcoin.

And you know what happens when that approval arrives, right? The discount on GBTC shares compared to its net-asset value (NAV) will shrink like a deflated balloon. So far, the discount has already narrowed from 46% to a measly 13% this year. Traders are snatching up GBTC shares like there’s no tomorrow, while cunningly hedging their risks by selling bitcoin in the spot and futures market. Once the conversion is approved, those market makers will be swimming back to the NAV.

• Bitcoin’s soaring increase is far ahead, why can’t Ethereum keep up?
• Crypto Firms on the Move: Wallets Shaking and Bacon at Lighting Speed!
• Bitcoin’s Bullish Action: Did Bears Get Caught Off Guard?

To put it simply, GBTC is the gift that keeps on giving. Just ask Ilan Solot, co-head of digital assets at Marex Solutions, who hilariously said, “Congratulations to those (many on this list) who nailed the narrowing of the spread playing against the futures.” Well, Ilan, congratulations indeed!

But wait, there’s more! Investors have been on a buying spree, grabbing GBTC shares with one hand and simultaneously selling BTC futures with the other. It’s a bi-legged strategy to profit from the narrowing discount of GBTC. However, this clever move may have curbed the full extent of bitcoin’s gains in the early part of the year.

Now, as the discount shrinks faster than your hopes and dreams after eating a sad salad, traders may start reversing this strategy. And you know what that means, right? Bullish pressure on bitcoin, baby! As Alexander S. Blume, managing partner at Two Prime Digital Assets, wisely told CoinDesk, “As this investment instrument normalizes back to NAV value for investors, it seems likely that short BTC pressure will subside and support upward pressure on BTC spot price.” In other words, the stage is set for bitcoin to soar like a majestic eagle.

And guess what? Bitcoin has already risen a solid 28% in less than two weeks, reaching epic heights above $35,000. The rumors of a spot-based ETF, including BlackRock’s supposed listing of its spot bitcoin ETF ticker (IBTC) on DTCC’s website, fueled this rapid ascent. And brace yourselves, because more spot-based ETFs are expected to grace our lives early next year. While everyone is throwing around predictions of bitcoin reaching $50,000 and beyond, we can’t ignore the possibility of additional selling pressure. As Blume brilliantly puts it, “ETFs will also allow more institutional participants to short this instrument. It’s unclear how that will affect the market.”

So, dear readers, fasten your seatbelts, because the crypto rollercoaster is about to take off. Prepare for a thrilling ride of highs and lows, triumphs and setbacks, and more memes than you can count. Remember, the landscape of digital assets is always changing, and the opportunities are endless. Don’t let fear hold you back from joining the party. Jump in, have fun, and who knows, you might just become the next crypto millionaire.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!