Bitcoin vs GBTC: Know 6 key differences

Jan 22 2024 By: Nisha Kumari Image credit: Reddit

Key takeaway

[{"selector":"#anim-550df7d6-1283-42c2-8be3-f855f46af0e2","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-25faad48-aba1-41af-86ef-6eab6940aa50","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Image credit: Bitcoin.com News As BTC gains popularity, some opt to buy themselves, while others use traditional ways of investing like stocks and bonds. GBTC caters that demand where one can simply invest in bitcoins.

Accessibility

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Annual Fees

[{"selector":"#anim-296d1772-3c8e-4039-9849-5f3f88e8a829","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-edd6f95c-f424-4c5c-8ce5-86bc8c5dee1f","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Image credit: Cointelegraph Grayscale charges a 2% management fee for bitcoin security and storage. Investors pay transaction fees for crypto exchanges, varying with the platform, market conditions, and transaction size.

Payment Option

[{"selector":"#anim-81511e39-c8ff-41f4-90c7-cf512a02c5e8","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-638e3fd9-1a18-4b3b-8775-c55e52184b92","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] GBTC shares may trade bitcoins at a premium or discounted value. On the other hand, the market determines the actual value of bitcoins. Image credit: Bitcoin.com News

Who secures & stores?

[{"selector":"#anim-e3079b55-413d-4450-91bc-aec3c97db42c","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-98a1f2b0-d4d5-4e21-abbd-d084258c2043","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Grayscale investment trust holds bitcoins, and are responsible for its security & storage. When it comes to BTC, investors directly secures & stores these digital assets. Image credit: Cointelegraph

Implication of Tax

[{"selector":"#anim-b1f408c3-dac1-4dee-aa2f-afa665083e84","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-68487a41-7e2e-4bd0-9f0b-ae97d6060f4a","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] GBTC shares are subject to capital gain taxes. The tax implications of holding Bitcoin directly vary based on the jurisdiction and the investor's individual circumstances. Image credit: News4Social

Risk of Regulatory bodies

[{"selector":"#anim-5a23732c-b5db-482c-9a5d-93210747d125","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-1aa2023e-4f10-4748-936a-352350ea61d8","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] GBTC adheres to SEC regulations, offering investor protection. In contrast, Bitcoin is decentralized and lacks regulatory oversight. Image credit: AMBCrypto Learn more