The liquid supply on Exchanges continues to dwindle thanks to Grayscale
Another day and another major inflow of bitcoin into the Grayscale Trust.
While the inflow doesn't necessarily mean that Grayscale "bought" the bitcoin like some seem to think, it does mean that the liquid supply of bitcoin on exchanges is likely getting smaller.
Once those bitcoin enter the Bitcoin Investment Trust, they simply don't leave.
In the last 24 hours alone, Grayscale added 16,244 bitcoin, which is largest single day addition ever.
Check it out:
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Those 16,244 bitcoins represent roughly $590 million worth of inflows.
That brings Grayscale's total assets under management to $22.9 billion at current prices.
But wait, there's more...
If this large inflow wasn't enough of a headline, the total amount represented 18x the number of bitcoin that was produced today.
So, while this number doesn't necessarily represent new buys, it does represent a buy at some point.
If this trend continues over time, the price will have to go up.
(Source: ~~~ embed:1351295165978312707/photo/1) twitter metadata:ZG9wdGlvbnx8aHR0cHM6Ly90d2l0dGVyLmNvbS9kb3B0aW9uL3N0YXR1cy8xMzUxMjk1MTY1OTc4MzEyNzA3L3Bob3RvLzEpfA== ~~~
The reason people are transferring their bitcoin into the Bitcoin Investment Trust is to take advantage of the premium that the GBTC shares are trading at currently.
They exchange their bitcoin for shares of GBTC, hold em for 6 months, and then can sell the shares at the market price, which is trading at roughly a 25% to the current net asset value.
For someone looking to hold bitcoin anyways, it's a great way to juice your expected returns.
The more bitcoin Grayscale soaks up, the easier it will be to push the price up when demand comes in.
Stay informed my friends.
-Doc
Posted Using LeoFinance Beta
I like this guys from GBTC! They are doing us a major favor, even if they are doing only for they gains. Imagine how many pension funds have risen lately due to this staking.
The more BTC get's away from the market, the better for BTC!
Posted Using LeoFinance Beta
Exactly. Once bitcoin goes into the trust, it really never comes back out. The supply on exchanges continues to dwindle.
@jrcornel, Day by day Bitcoin is becoming mainstream, in a way which means expansion of visibility of "Cryptocurrency Space". Stay blessed.
Yep, hopefully that trend continues. Yellen already took a shot at bitcoin today... lovely.
👍👍
It is slowly starting to rise again, I have been waiting patiently..
The price of bitcoin or the holdings of Grayscale?
Regarding the price - It may take some more consolidation first but the likely resolution is higher in my opinion.
Regarding Grayscale supply - They had the funds closed around the holidays for a bit which impacted inflows, but they are back to sucking up all the bitcoin now.
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Wow, that is pretty impressive. I am guessing you need to be holding a pretty decent sum of BTC for them to really even consider working with you or can anyone invest? That is nuts how much they are snagging up. It is hard for me to even wrap my head around sometimes.
Posted Using LeoFinance Beta
Yes, I believe it is accredited investors only, I'd have to double check though.
They could get the shaft though should the premium come out once selling - profit taking - kicks in. Always risk involved. ;-)
Not in this case. They get the shares at NAV, so if the premium comes out, they are right where they started had they just held the bitcoin. Only way they lose is if the trust traded at a discount instead of a premium, which it has never done it its almost 8 year history. It's averaged like a 17% premium since inception I belive.
Yeah, you're correct, but the guaranteed "premium" is very relative is all I was saying. Essentially, it will trade like any other derivative, just that there's never a "cash", or in this case, "Bitcoin" settlement. So, if too many head for the exit at the same time, a theoretical discount to NAV is not an impossibility. I don't think it's too awfully likely, but it is a distinct, and very real, possibility. Now, that would be the dip to buy!
Yea I guess it is possible, though it hasn't happened yet, ever. This setup is exactly how Blockfi pays the interest that it does. It uses the bitcoin that clients loan to them, then exchanges them for shares of gbtc and sells the shares after 6 months and locks the premium. It's not a perfect plan as bitcoin moves around quite a bit during those 6 months though.
impressive what happened to BITCOIN in this last month