Until an ETF is approved there is only one way to buy a Bitcoin derivative through a traditional brokerage account, the Grayscale Bitcoin Trust or GBTC. Grayscale is the world’s largest digital asset fund and so far they’ve been the only institution that’s been able to get approval to list a Bitcoin product on the stock market. Recently that product has seen a large surge in its price, proving that there is increasing institutional demand for Bitcoin.

Rising Demand for Bitcoin

While the prices for the GBTC trust are up 56% in the past three months, the true indicator of demand is that prices are up an incredible 47% since the market surge in the beginning of April. That’s a significant amount of growth to have happen in less than two weeks, especially since Bitcoin’s spot price rose just 28% in that same period.

The last time this happened the crypto bull Tom Lee took to Twitter to call it out as a sign of institutional demand.

CRYPTO: $GBTC premium to NAV creeping up to 36% on heels of $BTC surge to ~$4,000



Rise in premium is a sign of institutional net buying (easier to buy this ETN from ⁦@GrayscaleInvest⁩ than buy via a crypto exchange)…



…another sign 2019 way better than 2018 for crypto pic.twitter.com/hdFh8y3sY9 — Thomas Lee (@fundstrat) February 19, 2019

Institutions are clearly interested in buying cryptocurrency products and that’s good news for hodlers. It means that a new bull market might not be as far off as some people think.

Further, all of this buying provides good evidence that once an ETF is finally approved there will be significant demand for it. If investors are willing to pay a premium for the GBTC product they’ll no doubt be willing to invest even more money when they can purchase an ETF at a better price.

The Future of the Grayscale Trust

Cryptocurrency Facts points out that, “GBTC is the only stock offered on NASDAQ.com or any United States public stock exchange that holds bitcoin as its primary asset. It is also one of the only choices for investing in Bitcoin without buying Bitcoin directly.”

That’s good news for investors who want to gain exposure to Bitcoin without having to buy it off an exchange. It means they don’t have to worry about sending their coins to the wrong address, getting hacked or phished, or anything else that can go wrong. However, it does mean paying a premium that can go as high as 100% over Bitcoin’s spot price.

It’s likely then that there will be fewer investors for Grayscale’s fund once other products are available. For now though it’s the only game in town and it’s proving that big players want to put their money into Bitcoin, a move that they would not consider unless they believed that there was real money to be made.



