Bitcoin Prices Reach All-Time Highs, but Bitcoin Investment Trust Lags
Over the weekend, bitcoin prices surged nearly 20% to reach a new all-time high. But those who own the Bitcoin Investment Trust (NASDAQOTH: GBTC) haven't seen their shares rise in kind. Bitcoin Investment Trust is up about 8% as I write this article, less than half of bitcoin's gain over the weekend.
Bitcoin Investment Trust is best explained as a bitcoin closed-end fund. Each share represents ownership of roughly 0.0926 bitcoin. Because the supply of Bitcoin Investment Trust stock doesn't expand in proportion to demand, shares frequently trade at a premium to the value of the bitcoin that the trust holds.
As I write this, shares trade at a 63% premium to the value of the underlying bitcoin, down from the 82% premium at market close on Friday. Due to the declining premium, shares of Bitcoin Investment Trust have failed to match bitcoin's recent gains.
Source: Fool.com
