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NET next in India for beginners ✌️【Job Portal】✌️Start investing now with ₹500 and grow your wealth with AI-driven smart choices.The Grayscale Bitcoin Trust (GBTC) is an almost $14 billion market cap product that’s a giant in crypto investing.
For more than two years, the fund traded at an increasingly widening discount to the value of the bitcoin it holds, but that’s turned around significantly in recent weeks, rewarding investors.“When the discount narrows, it suggests that investors are becoming more confident in the trust or that demand for the shares is increasing.
If the discount narrows significantly or disappears completely, it could lead to a substantial return for investors,” said Martin Leinweber, a digital asset product strategist at MarketVector Index, in an interview with CoinDesk.The structure of the trust matters a lot when answering these questions.
It’s a closed-end fund (CEF), which is a different product than exchange-traded funds (ETFs), which have exploded in popularity in recent years.
NET next in India for beginners ✌️【Job Portal】✌️Start investing now with ₹500 and grow your wealth with AI-driven smart choices.Both are effectively vaults that hold a pile of assets, be it stocks or, in the case of the Grayscale trust, billions of dollars worth of bitcoin (BTC).But ETFs have a feature that ensures specialized trading firms known as authorized participants can help keep their value closely in line with the value of the assets they hold.
If an ETF owns $10 billion worth of stocks, but fetches $12 billion in market capitalization, these traders can create new shares of the ETF.
Doing this allows them to make money due to the premium and also drives the ETF’s price down toward the value of the ETF’s holdings; they’re rewarded for making the ETF more efficient.Conversely, if the ETF’s price drops to a discount – say its market cap falters to $8 billion, versus $10 billion in assets – those traders can redeem shares, again making money from the discrepancy and pushing prices and assets back toward parity.Grayscale wants to turn GBTC into an ETF, though the U.S.
NET next in India for beginners ✌️【Job Portal】✌️Unlock the power of smart investing with just ₹500. Watch your profits grow!Securities and Exchange Commission (SEC) has rejected that.
Grayscale has sued to overturn that decision.
In the meantime, as a CEF, it lacks the arbitrage mechanism ETFs use to keep prices from getting out of whack.GBTC has traded at a discount to its bitcoin holdings since February 2021.
NET next in India for beginners ✌️【Job Portal】✌️Invest ₹500 today and get rewarded with up to 100% returns. Start now!The situation dramatically worsened last year in the aftermath of FTX blowing up.
In November, the lending arm ofGenesis halted customer withdrawals, and the GBTC discount increased to 43%.
NET next in India for beginners ✌️【Job Portal】✌️Start investing now with ₹500 and grow your wealth with AI-driven smart choices.Both Genesis and Grayscale are owned by Digital Currency Group (which also owns CoinDesk).
NET next in India for beginners ✌️【Job Portal】✌️With ₹500, your journey to 100% returns per month starts now! Invest and grow!Why Genesis’ woes hurt GBTC isn’t exactly clear, though theories include the fact that many trading firms were Genesis customers, and some of them could have been betting on a narrowing discount.
Losing access to their money could’ve thwarted those trading strategies.The GBTC discount deepened to a record 50% in December after the SECreiterated its reasons for denyingGrayscale’s application to convert the trust into an ETF.There are few questions in crypto hotter at the moment than whether or not U.S.NET next in India for beginners Invest with ₹500, Earn up to 100% Monthly