The Bitcoin Investment Trust is benefiting from the recent BTC price surge. Now that the publicly traded offering surpassed the US$200m market cap, things are looking very promising for GBTC. This news seems to indicate mainstream traders are flocking to GBTC over the past week.
Publicly traded stocks have seen their fair share of problems during 2016. Traditional stocks have seen a lot of losses and small gains over time, resulting in a barely positive balance. But GBTC has successfully bucked this trend, as their stock price has gone up gradually all year long.
A Positive Start of 2017 For GBTC
Just over a week ago, the share price of GBTC [OTCMKTS:GBTC] sat at just below the US$120 mark. Fast forward to today and the price increased to US$136. An 11.8% gain has been noted over the past 24 hours, which can be seen as a vote of confidence by mainstream investors.
GBTC has been through some issues in 2016, including a cease and desist issued by the SEC. Thankfully, that matter was resolved rather quickly, and a settlement was reached by all parties involved. However, this goes to show the road ahead for Bitcoin ETFs will not be without regulatory hurdles.
The increasing GBTC price comes on the heels of another bullish Bitcoin trend. With the value per BTC above the US$1,050 mark, there seems to be an insatiable thirst for the cryptocurrency. China continues to dominate the trading volume, as it has done for the past several years. But other regions are playing their part too, thanks to local governments banning particular banknotes or issuing new currency.
It is important to keep in mind GBTC is trading Bitcoin at much higher prices than the market average. In May of 2016, the company was trading 60% higher than Bitcoin itself. While Bitcoin Investment Trust enables traders to gain exposure to Bitcoin price movements, that is quite a large gap. A very significant premium to pay for not having to deal with buying, trading, or storing Bitcoin directly, that much is certain.
But in the end, an increasing GBTC valuation is a positive note for Bitcoin as a whole. Ever GBTC share represents roughly 0.1 Bitcoin, which translates to one BTC being valued at US$1,360. With the current bullish price trend in place, it is not unlikely the actual market price will reach the point in the coming weeks.
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