Cryptocurrency down about $4,000 from recent high.
Premium to holdings has fallen significantly.
If you believe in Bitcoin, this is your opportunity.
Earlier this week, I detailed how investors should sell the Bitcoin Investment Trust (OTCQX:GBTC). With the trust trading at more than twice the price of its holdings, plus Bitcoin itself looking to be in a short term bubble, I just didn’t see how the risk was worth it for investors. However, the situation has changed quite a bit in recent days, which may now mean investors that believe in the cryptocurrency’s future might want to consider this opportunity.
As the chart below shows, BitCoin was approaching $20,000 earlier this week, but a pullback has since ensued. As I write this article, the price is about $15,800, down almost $4,000 from its high. Earlier on Thursday, the price was down to just over $15,000, but it has rebounded during the afternoon period. Perhaps part of the jump has to do with the news that Goldman Sachs (GS) is trying to put together a cryptocurrency trading desk, which it hopes to have up and running sometime in the first half of 2018.
(Source: cnbc.com Bitcoin page)
As I detailed in my earlier article, the Bitcoin Investment Trust only held about 0.09196847 coins per share at the end of November, so let’s round off to one-tenth just for some easy math. If Bitcoin was hypothetically at $19,000, then the Bitcoin holdings of the trust would be worth $1,900. While shares have traded at a premium over time, the difference skyrocketed to the point where I thought investors just were going to be in trouble.
I put together a double chart below to show how the situation has dramatically changed in the past couple of days. The prices below are representative of 4pm Eastern on the respective days. On the left, the Bitcoin Investment Trust was going for more than double the value of its holdings. As of Thursday afternoon, that premium was down to less than 20%.
Read more at:
https://seekingalpha.com/article/4133371-buy-bitcoin-investment-trust
