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Grayscale Bitcoin Trust

Miller Value Fund Files With SEC To Buy Bitcoin Via GBTC Trust Fund

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Bitcoin’s adoption is rising and several new institutions are jumping the bandwagon to reap profits out of the world’s flagship cryptocurrency. BTC Trusts have become wildly popular as it paved the way to ride the growth of the crypto markets by gaining indirect exposure to the crypto-asset.

In the latest development, the asset management fund, Miller Value Fund is all set to enter the cryptocurrency realm.

According to reports, Bill Miller’s investment trust has filed with the US Securities and Exchange Commission [SEC] seeking investment exposure to BTC indirectly by investing in the Grayscale Bitcoin Trust.

The company’s official filing, which was released this week, entailed extensive discussions on the cryptocurrency and also stated that their ‘Opportunity Trust Fund’ is getting into BTC.

The edit explained

“The Fund may seek investment exposure to BTC indirectly by investing in the Grayscale Bitcoin Trust, an entity that holds BTC. Grayscale Bitcoin Trust is a privately offered investment vehicle, the shares of which are also available over-the-counter. BTC is a digital commodity that is not issued by a government, bank, or central organization.”

The official filing also disclosed that the firm is looking for a 15% exposure via the GBTC trust fund and would stop purchasing once the said cap is reached. Noting the same, Ben Miller’s Trust further detailed,

“BTC has no physical existence beyond the record of transactions on the Blockchain. The Grayscale Bitcoin Trust invests principally in bitcoin. The Fund will not make any additional investments in the Grayscale Bitcoin Trust if, as a result of the investment, its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment.”

A quick primer: The Miller Value Partners has $3.5 billion in assets under management [AUM] is essentially operated by Bill Miller, a veteran investor and asset manager.

Miller has been a BTC investor for quite some time now. The news came hours before he penned down a letter touting the premier cryptocurrency as a growing investment. However, the latest announcement will be the company’s first tryst at managing a BTC portfolio for a publically traded fund.

Bitcoin’s Red-hot Rally Comes To Halt; What’s Next?

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Cryptocurrency proponents anticipated Bitcoin to reclaim its fort above $40,000. However, the crypto-asset has been facing quite a stiff resistance at this level. Despite many in the community, counting for the token to bounce back, it has now entered a consolidation phase preceding a few major dips.

So what is holding back the uptrend?

Bitcoin Under Institutional Exhaustion?

Reportedly, the momentum of flows into the $20 billion Grayscale Bitcoin Trust [GBTC] have topped up when four-week rolling averages are taken into consideration. Over the past two weeks, the fund took a plunge of more than 20% through the 22nd of January, which coincided with the significant double-digit pullback in BTC’s price.

The JPMorgan strategists led by Nikolaos Panigirtzoglou stated,

“At the moment, the institutional flow impulse behind the Grayscale Bitcoin Trust is not strong enough for Bitcoin to break out above $40,000.”

The strategists also went on to add that “risk is that momentum traders will continue to unwind BTC futures positions.” Despite the growing uncertainty, it can be safely said that Bitcoin’s latest rally is in no way similar to the 2017 mania that preceded a massive collapse.

Furthermore, data compiled by the crypto-analytics platform, Skew, revealed that the coin’s realized volatility has hit levels as high as March 2020. So what does this mean?

Bitcoin

During bull runs such as this, price fluctuations involved with BTC are more normal. This is due to the fact that market participants often tend to cash out at different points. Hence, greater volatility in the crypto-asset’s value essentially means more the extent of the deviation from its average price something that is to be expected during the bull run.

It is also important to note that overall the volatility of Bitcoin has gone down significantly while its price and market cap risen over time. If this trend continues, it can be a much-needed respite for the investors who witnessed massive FUDs and selling spark erratic price movements.

Despite the cooling off institutional momentum, Raoul Pal, founder of Real Vision, predicted

“Feels like BTC is getting ready to climb the wall of FUD fear. Positive seasonality and a nice wedge give it a good chance to hit $50k by March.”

Grayscale’s Bitcoin Holdings Surpasses Half a Million

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Grayscale is on fire and rightly so as the platform’s BTC holdings increased more than 2x, and Assets Under Management [AUM] is up more than 4x. The institutional crypto giant Grayscale revealed that it now holds more than 500,000 BTC in its Bitcoin Trust.

This news comes after Grayscale marked this quarter for accumulating its most massive inflow of capital of which its Bitcoin Trust’s assets Under management was observed to be the fastest-growing investment products. Besides, the Managing Director at Grayscale Investments, Michael Sonnenshein recently tweeted that the team has alone accumulated more than $115 million worth of Bitcoin on the 12th of November alone.

Notifying the same, Grayscale had further revealed that it owns $8.35 billion worth of Bitcoins which represented nearly 2.7% of Bitcoin’s outstanding supply. According to the data compiled by Bybt, shares in the Grayscale Bitcoin Trust currently represent $15.62 worth of Bitcoin each, with a marker price per share of $18.86 and a premium rate of 20.74%.

Grayscale Bitcoin Trust’s Aggressive Accumulation

Bitcoin Trust which happens to be Grayscale Investments’ popular investment vehicle has remained the most widely selected investment product this year. In its most recent report for the third quarter, the total investments into the digital asset managers fund in those three months alone accounted for more than a billion dollars. Upon adding the first and the second quarters, Grayscale reached record-breaking figures.

This has, in turn, increased the share price of Grayscale Bitcoin Trust [GBTC] by an astounding 63% since the 1st of October 2020.

Launched more than seven years ago, Grayscale is a US-based crypto investment firm that is one of the largest purchasers of Bitcoin in the world. Its rise to immense popularity can be attributed to the fact that the investors were potentially buying the asset as a way of indirectly owning Bitcoin because of several reasons.

Investing in a Bitcoin Trust essentially enables individuals to gain exposure to the cryptocurrency without having to worry about how to store it, and hence conforming with the law or filing separate taxes. Additionally, Grayscale’s Trust offers its investors exposure to the crypto in a tax-friendly way since certain IRA, Roth IRA, as well as other brokerages and investor accounts, would not likely give tax breaks on Bitcoin investment but, will give them for investments of publicly traded trusts.

Bitcoin May Rally After 2nd Trillion Dollar U.S Stimulus Payments: OKEx CEO

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After an unexpected market collapse in March 2020, Donald Trump, President of the United States, signed a monumental stimulus bill worth close to $2.2 trillion. The $1200 stimulus check was sent to every individual and small business in the U.S. across the nation.

On 22 June, President Trump was asked about the 2nd round of stimulus payments and he responded in anticipation that another stimulus check was on the way. The announcement received a response from Jay Hao, CEO of OKEx Exchange, who believed that another Bitcoin price rally could be driven by the second round of stimulus.

In a recent LinkedIn post, Hao stated that during the 1st round of stimulus payments, Bitcoin ‘s valuation had jumped by 58 percent from $6,500 to $10,450, and expected a similar turn of events with the 2nd round of stimulus payments.

He added that two major aspects may come into play during this time, which include institutions and retail interest in Bitcoin. Taking Grayscale’s example, he said,

“According to the trust’s latest investment report released on June 19, its current total investment in the digital currency is $3.90 billion, of which Bitcoin shares account for 88.8% (about 369,368 BTC).”

Hao believed that Grayscale’s accumulation spree was a direct indication of the increased rate of institutional adoption of Bitcoin. Although there is no concrete evidence that Grayscale Bitcoin Trust is a publicly traded investment vehicle in the U.S. where institutions can invest in Bitcoin, Hao ‘s comment made sense.

With Federal Reserves recently revealed that banks currently had an abundance of cash, OKEx ‘s CEO suggested that further capital flow would allow retail investors to recognize Bitcoin as an alternative investment. With major banks offering extremely low-interest rates, Bitcoin appeared to be the ideal form of investment for higher ROIs.

$1200 worth BTC deposits spiked during 1st U.S Stimulus payments 

It is worth noting the fact that during the 1st round of stimulus checks, Brian Armstrong, CEO on Coinbase revealed a chart that identified a spike in $1200 deposits on his exchange. Binance US had also reported that users were depositing $1200 increments on the U.S division on the exchange.

Considering Bitcoin had generated such interest when the asset was involved with extreme volatility, the recent stability attained by BTC may improve upon this sentiment of people. Hao’s comment may ring true in the aspect, and another price rally for Bitcoin could possibly surface after the 2nd round of stimulus is activated across the U.S states.

Bitcoin Expected To Receive More Institutional Investors as Grayscale Investments Gets Recognized By The SEC

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Cryptocurrency companies have been making a name for themselves in the past couple of months with several achieving mainstream status. One of the biggest winners in that category has been Grayscale Bitcoin Trust, the company that launched the famous “DropGold” campaign.

Just recently, Grayscale Investments announced that it has become an SEC reporting company. This comes two months after the company had filed a Registration Statement on Form 10 with the SEC on behalf of Grayscale Bitcoin Trust [GBTC].

Since its inception, Grayscale Bitcoin Trust has grown to become the world’s largest Bitcoin investment product. The company recently released a circular that addressed the organization’s plans for the future now that it was an SEC reporting company.

GBTC claimed that its main directive is to provide Bitcoin services to users without them having to go through the hassle of managing it. This includes challenges such as storing, buying and safekeeping Bitcoin on their own.

The way GBTC works is similar to that of financial and tax advisors, one of the reasons why it was accepted by the SEC. By becoming the first digital investment vehicle to be registered with the SEC, GBTC has broadened Bitcoin’s availability to all US investors.

GBTC’s SEC addition will also allow more institutional investors to get into the Bitcoin field. The entry of institutions was earlier reduced because of the lack of credibility in the eyes of regulatory authorities. According to the Grayscale Investment report:

“While the Trust has historically published quarterly and annual reports as well as audited financial statements pursuant to the OTC Markets Alternative Reporting Standard (ARS), the Trust will now file its quarterly and annual reports as well as audited financial statements as 10-Qs and 10-Ks with the SEC, along with current reports on Form 8-K, in addition to complying with all other obligations under the Exchange Act.”

With the addition of the SEC’s structure, the trust is designed to have its share value reflect the performance of Bitcoin. The company will also have fewer expenses and other liabilities as it is “solely and passively invested in Bitcoin”. According to the report, GBTC will continue to not run the redemption program or trade on a national securities exchange.

The news was also shared by Coinbase Custody as Grayscale Investments was its client. The Brian Armstrong led company was confident that being part of the SEC was an incredible milestone for the entire digital currency market.