Here Are Two Reasons To Check Out Bitcoin Investment Trust (OTCMKTS:GBTC) Right Now

The cryptocurrency market has been incredibly volatile over the last couple of months and especially during the start of this week, as a wave of mainstream coverage has attracted an increased amount of public market capital to the sector.

Not all of this capital, however, is being used to buy cryptocurrency directly.

Based on the barriers to entry associated with buying, and the difficulty of storing, bitcoin and other cryptocurrencies securely, investors who are perhaps more familiar with the traditional equities markets have been looking for alternative exposures.

Some have turned to publicly traded companies that have operations linked to blockchain technology but, in many cases, it’s difficult to ascertain just how involved a public company, and in particular, one that’s traded OTC, is in bitcoin and blockchain.

As such, one of the favorite allocations for anybody looking to pick up an exposure to bitcoin without buying the asset has been Bitcoin Investment Trust (OTCMKTS: GBTC).

This is the Grayscale owned and operated trust that’s (by way of Grayscale’s owner), a subsidiary entity of Digital Currency Group, a company owned by Barry Silbert and one that also has ties to Coindesk.

All of these names are pretty well respected in the sector and this has lent a degree of credibility to Bitcoin Investment Trust, which, in turn, has made it one of the top allocations in this sector from a publicly traded market perspective.

Over the last month or so, however, Bitcoin Investment Trust has taken a real hit in line with the price of its underlying asset – bitcoin. On December 18, GBTC traded for more than $3,400 a share. At close of play on January 17, this had dipped to $1,857.

During this period, bitcoin fell from nearly $20,000 per coin to below $10,000 but has since recovered to in around $12,000 at time of writing – midmorning on Friday. GBTC, However, is yet to stage a similar recovery, suggesting there is a near-term recovery play on the cards in this stock for any short-term traders out there.

Looking longer-term, there is also a split type play on offer.

GBTC announced last week that it intended to carry out a stock split at a ratio of 91-for-1. As a result of the split, each investor in the ETF will receive 91 additional shares for every 1 share that they hold and, at the same time, the price per share will reduce by a multiple of 91.

At current prices, then, in and around $1,857, each GBTC share will be worth a little over $20 once the split has taken hold.

The reasoning behind this is rooted in accessibility. Right now, gaining access to bitcoin through GBTC is costly. With each share only priced at around $20 post-split, this cost of access is much cheaper and, by proxy, should attract a wave of investor capital that previously was prohibited from entering by this route because of the price per share (keep in mind that this is not like cryptocurrency investing, you can’t buy a fraction of a share).

So, while we will almost certainly see some degree of appreciation as GBTC recovers in line with the price of its underlying asset, we expect to also see a longer-term trend is driven by the stock split and, in turn, the reduced cost barrier facing speculative traders and investors.

Keep in mind that this one is still very much tied to the price of bitcoin and there is no guarantee that the recent recovery is an overarching return to the upside momentum – we may still see price dip further before we get a solid recovery.

With that said, however, all signs suggest that current prices are bottoming out, meaning while there exists some risk, there’s plenty of reward on offer to justify this risk as things stand.

We will be updating our subscribers as soon as we know more. For the latest on GBTC, sign up below!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Image courtesy of Grayscale