Compared to last year, things currently seen grim for Bitcoin. There probably isn’t anyone interested in Bitcoin, who’s happy to see the state of the market. The only United States Bitcoin Investment Trust (GBTC) is currently facing quite the predicament. The trust has taken head on the negative impact of the markets. Investors are trying to come up with solutions to compensate for the market’s descent.
According to an article posted on Bloomberg yesterday, Grayscale Investments Inc. has $1.5 billion under management. No matter the state of the market, this is not a small sum. Grayscale is behind the only United States Bitcoin Trust (GBTC).
The article reports that GBTC has seen nearly an 80% price decline in its shares since December 2017. 10 months have passed since Bitcoin was priced at around $20 000. Unfortunately for the trust, the 80% drop in share price is more than the Bitcoin price drop, which is around 65-66%.
GBTC should have tried to cut its losses and aim to keep investors in the long run
The natural conclusion would be to blame the market for the company’s downward trajectory. However, many investors claim that as usual, there is more than meets the eye. Some investors state that GBTC has very expensive fees, as it charges 2% for every single investment.
This does not seem like much, but usually mutual funds charge around 0.60%. Some experts believe that GBTC should have acted sooner. The falling prices should have been met with reduced charges in order to stimulate investors. With prices remaining the same, this was essentially a gateway for disaster.
Another report from Bloomberg states that high net-worth individuals are quickly replaced by institutional investors. It’s also noted that traditional investing and hedge funds have been more involved in the $220 billion crypto market via private transactions. This was of course made possible due to miners holding regular sales instead of waiting for rallies to sell.
If we look at a Chainalysis research about Bitcoin investors, we’ll notice that speculators held their positions in the last few months. According to some experts, this is due to the markets becoming more stable. Others believe that the markets are just about ready to blow. Since May this year, the amount of Bitcoin held for investing has been steady at around 30%.
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