Well this is interesting...
Grayscale announced today that they are offering a service where you can exchange your digital bitcoin holdings for shares in their GBTC Bitcoin Investment Trust.
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Hmm... interesting.
Before you go all ape-$%it, this could actually be a very good thing for certain investors.
First people will say, not your keys, not your coins, and while that is true, there are many out there that are not interested in custodying their crypto assets.
This is especially true when talking about investors of size and or institutional investors.
The risk of losing hundreds of millions of dollars worth of bitcoin is much too great to try and keep that value secure yourself.
You lose your keys and that value could be locked forever.
Which is why a custodian is so important.
Grayscale to the rescue!
Using the method above you can convert your tokens into shares that are guaranteed by the issuer, insured, have audited financials and tax statements, and carries the same protections as owning a traditional stock.
This could also help a bitcoin owner of size get to fiat without going through crypto exchanges that may crash the price in the process.
There are some downsides of course, and this doesn't make sense for everyone, but overall I think this is a very good move by Grayscale.
In fact as I alluded to above, it may also help remove some of the liquidity from the spot bitcoin markets, which would actually be a boon for prices.
Stay informed my friends.
-Doc
I'm not really getting this part m8, can you explain in a more detailed way? How will shares in GTBC decrease the liquidity from the spot bitcoin market?
Maybe the lango is to complex for me with my current knowledge 🤔
Well you are converting bitcoin for shares. Those bitcoin are then locked up by the GBTC trust. This reduces the supply of freely trading bitcoin in the spot markets.
Don't do it, you will lose money instantly.
I am not necessarily recommending it to any retail investors, but it may make sense for large investors to give it a go.