Here’s Why Grayscale Bitcoin Trust Is Soaring Today

0
47

Sharp Credit – Credit News – Credit Information

What happened

Grayscale Bitcoin Trust (NASDAQOTH: GBTC) , an investment vehicle designed to allow investors to indirectly own bitcoin, is moving higher on Wednesday. As of 3:20 p.m. EDT, shares of the fund were up by about 11%.

So what

As you can probably guess, Grayscale Bitcoin Trust is moving higher because the price of bitcoin is rising. Bitcoin has gone up by 38% in the past week and is now trading for more than $8,100 — the highest price we’ve seen in months and more than double the lows reached earlier this year.

Three stacks of gold coins with bitcoin symbols.

Image source: Getty Images.

The main reason for the continued rally seems to be increased demand from institutional investors . There’s a rumor that Fidelity is preparing to offer cryptocurrency trading to institutional clients, and Grayscale Bitcoin Trust itself recently reported record inflows during the first quarter, with about three-fourths of the new money coming from institutional investors.

Now what

There are a few things to keep in mind. First, even after its recent rally, bitcoin is trading for less than half of its 2017 peak value of nearly $20,000, so we’re still a long way from breaking out to new highs.

And, also keep in mind that while Grayscale Bitcoin Trust’s price moves with the price of bitcoin, it’s not always a perfect relationship. Specifically, the trust often trades at a massive premium to the value of the bitcoin it owns — as I write this, the premium sits at about 30%, but has been much higher in the past.

10 stocks we like better than Bitcoin Investment Trust
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Bitcoin Investment Trust wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Original Source