With nearly 650K Bitcoins in its kitty, the Grayscale Bitcoin Trust (GBTC) is the world’s largest Bitcoin fund with ~$38 billion in assets under management. Over the last year, some aggressive Bitcoin purchases and massive BTC price rally has helped GBTC gain huge market dominance.
If GBTC continues at this rate, it can flip the world’s largest Gold ETF GLD by the end of 2021. As of now, GLD is 60% bigger than GBTC with $58 billion in net assets under management. The latest prediction that GBTC can overtake GLD comes from the change in assets under management happening since June 2020.
The popular Twitter handle Ecoinometrics further adds that if there’s no major inflow or outflow either in GBTC or GLD, then it will take the BTC price to surge anywhere between 80K-100K for GBTC to surpass GLD. Many analysts have already given BTC price targets above $100K ahead this year. Thus, the chances of flipping could be very much on the cards.
However, the Grayscale Bitcoin Trust (GBTC) is already facing heat from other competitive Bitcoin investment alternatives in the market. The Grayscale Bitcoin Trust (GBTC) premium has been trading at a discount over the last month.
Grayscale Bitcoin Trust first showed -0.68% on February 23, except for the two days, the rest of the time were all traded at a negative premium, even reached -11.59% on March 4. The reason may be due to competition from the three Bitcoin ETFs listed in Canada. pic.twitter.com/DF4fms3xI6
— Wu Blockchain (@WuBlockchain) March 22, 2021
U.S. Bitcoin ETF Can Play A Spoilsport for GBTC
There’s a massive buzz in the market about the arrival of U.S. Bitcoin ETF ahead this year. The Purpose Bitcoin ETF launched in Canada last month has already crossed $1 billion CAD in assets under management holding over 14,100 Bitcoins in cold storage.
It is clear that the investor demand and appetite for the Bitcoin ETF in the market is rising. If a Bitcoin ETF goes live in the U.S, it could potentially be many times bigger looking at the way financial institutions and U.S. corporates have joined the Bitcoin bandwagon over the last few months. Currently, there are five Bitcoin ETF applications with the SEC.
There are now at least 5 U.S. Bitcoin ETF applications awaiting approval: WisdomTree, VanEck, NYDIG Asset Management, Valkyrie Digital Assets, Skybridge and First Trust
A decision by the SEC could come within the next 45 days for the first U.S. #Bitcoin ETF
— Bloqport (@Bloqport) March 20, 2021
There’s no doubt that Grayscale has the lion’s share when it comes to Bitcoin holdings. But Ecoinometrics notes that other public traded companies like MicroStrategy can emerge as strong alternative way to get long BTC.
With 91,326 BTC, the value of their treasury is equivalent to more that 75% of the stock’s market cap… pic.twitter.com/LqkO0RgRqJ
— ecoinometrics (@ecoinometrics) March 21, 2021
The point here is that while Grayscale is still the undisputed leader, it’s no longer the only game in town. Let’s see if the Grayscale Bitcoin Trust (GBTC) can really live up to its expectations and flip GLD this year. This will certainly be a big milestone and achievement for the Bitcoin community as a whole.