How does GBTC track the price of Bitcoin and what are the implications for investors?

1 answers

• Dec 27, 2021 · 3 years ago
  GBTC tracks the price of Bitcoin by holding a certain amount of Bitcoin and issuing shares that represent ownership of those Bitcoins. The trust then sells these shares to investors on the stock market. The price of GBTC shares is determined by the market demand and supply, which is influenced by the price of Bitcoin. This means that if the price of Bitcoin goes up, the price of GBTC shares will also go up, and vice versa. For investors, this means that investing in GBTC can provide exposure to the price movements of Bitcoin without actually having to buy and store Bitcoin themselves. However, it's important to note that GBTC shares can trade at a premium or discount to the actual value of the underlying Bitcoin holdings, which can impact the returns for investors.
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