The first publicly traded, Bitcoin-related investment vehicle, Bitcoin Investment Trust, is up by 1600% in two years.
Bitcoin Investment Trust
The trust currently has reached a market value of $1.8 billion dollars, causing some high-profile investors to raise the alarm bell.
Controversial investor Andrew Left, who is famous for predicting when shares in overvalued companies will take a fall, has said this valuation is “completely ridiculous” and is warning against the structure of the fund, though not necessarily Bitcoin itself.
The trust is run by Grayscale Investments, an investment firm that focuses specifically on digital currencies, and is designed to track the price of Bitcoin. The actual book value of the investment vehicle is around $820 million, based on Bitcoin’s price pushing past $4,700 and the fund holding 174,174 Bitcoins. You therefore have a situation where the market value of the fund is double that of the underlying asset.
One of the fund’s biggest attractions is the ability to trade in the price of Bitcoin, without going through the hassle of actually buying it directly. This is another red-flag for Left, who points out:
“[Grayscale doesn’t] even have insurance for the Bitcoin that they are custodians of.”
The Bitcoin Investment Trust is up by 726% this year on the back of Bitcoin’s record-breaking price increase. Bitcoin’s price only increased by 400% in comparison. The high premium could be a problem for new investors.
The fund is the first of its kind and that plays a big factor in it’s over inflated valuation. However, the cryptocurrency market is evolving fast. Other, similar funds will undoubtedly enter the market, which will put a lot of downward pressure on the valuation of the Bitcoin Investment Trust.
Not indicating that the content you copy/paste is not your original work could be seen as plagiarism.
Some tips to share content and add value:
Repeated plagiarized posts are considered spam. Spam is discouraged by the community, and may result in action from the cheetah bot.
Creative Commons: If you are posting content under a Creative Commons license, please attribute and link according to the specific license. If you are posting content under CC0 or Public Domain please consider noting that at the end of your post.
If you are actually the original author, please do reply to let us know!
Thank You!
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
http://www.abitofnews.com/famous-investor-thinks-bitcoin-investment-trust-is-overrated/
Please comment and upvote
Here are some related posts:
I'm the AskSteem Bot [BETA] - I try to be helpful but if you don't want me click my username and hit "mute". You can also leave feedback.
Is it Real About Satoshi Nakamoto???
https://steemit.com/bitcoin/@rajag234/is-it-a-coincidence-satoshi-nakamoto
This post recieved an upvote from minnowpond. If you would like to recieve upvotes from minnowpond on all your posts, simply FOLLOW @minnowpond Please consider upvoting this comment as this project is supported only by your upvotes!