Investment Funds for Exposure to Bitcoin
Bitcoin (BTC) may be the most unexpected asset class in recent years for investment. Bitcoin, which exhibits schizophrenic and unpredictable price fluctuations, has also emerged as the best-performing asset in the previous ten years.
Three well-known Investment Trusts that Offer Exposure To Bitcoin are briefly Described here :
1. Grayscale Bitcoin Trust (GBTC) for Investment
This fund was started in 2013 by Alternative Currency Asset Management as the Bitcoin Trust, an open-ended private trust. Grayscale Investments LLC is now the sponsor of this fund. It started open market trading in 2015 with the ticker GBTC. The fund’s goal is to track Bitcoin’s fundamental worth.
The custodian of the fund’s assets is Coinbase Custody. The trust is exclusively available to authorized investors and institutional investors, and the minimum investment amount is $50,000. OTC markets and numerous brokerages both provide GBTC for trading.
Since GBTC is the nation’s first and only publicly traded Bitcoin trust, its success has mirrored that of the cryptocurrency market. Initial trading in GBTC shares was characterized by extreme volatility and low liquidity.
The fund has since reported yearly increases in AUM. Similar to how Bitcoin saw a quick ascent and a subsequent decline between 2020 and 2022, GBTC’s achievements likewise followed similarly.
2.Bitwise10 Crypto Index Fund (BITW)
The Bitwise 10 Crypto Index Fund (BITW), created by Bitwise Asset Management, made its debut in the second half of 2020.
BITW does not grant indirect ownership of Bitcoin, in contrast to GBTC. Instead, it follows another Bitwise product called the Bitwise 10 Large Cap Crypto Index, which aims to expose investors to 80% of the cryptocurrency market. Bitcoin represented more than half of the fund’s holdings, making up 68.9% of the total. With a 29% share, Ethereum’s ether came in second. Less than 1% of the remaining holdings of the fund were spread among a variety of cryptocurrencies.
The price of BITW fluctuates similarly to other crypto items. In the three months following its introduction to OTC markets, its price increased by more than 1,200%. That price gain, however, conceals a roller-coaster journey in which the price also fell by more than 75% in a little over a week.
3. Osprey Bitcoin Trust (OBTC)
As an investment instrument, The Osprey Bitcoin Trust (OBTC) debuted in 2019’s private markets. However, it wasn’t open to the general public until February 2021. Coin Metrics Bletchley Indexes are monitored by the trust (CMBI).
CMBI benchmarks, which were introduced in 2015, keep track of the prices of ether and bitcoin.
It has two distict features ,the first is Coinbase, who serves as its custodian. Its pricing is the second, and more significant, attribute. Osprey differentiates itself from other trusts by charging cheaper management fees—roughly 0.49%. However, it is unclear how Osprey was able to lower the price of its product.