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When searching for news related to Bitcoin (BTC), one of the most frequent topics we meet is about 'Grayscale GBTC, and the increased BTC holdings of Grayscale". In this post, let's take a quick look at what Grayscale is and how it operates.
Grayscale (https://grayscale.co/) is an investment company that was established in 2013 and provides services for digital assets. To put it more simply, it is a company that aims to set up a trust, receive money from investors and make a profit, and take an operating fee in return. Grayscale currently offers 9 single asset trust services and 1 large-scale digital fund service to investors. More specifically, Grayscale offers 9 single asset trust services including Bitcoin Trust (GBTC, Grayscale Bitcoin Trust), Ethereum Trust, Bitcoin Cash, Ethereum Classic, Horizon, Litecoin, Stellar Lumens, Ripple, Zcash, and 1 large-scale digital fund service created by combining multiple asset products with a large market capitalization such as Bitcoin, Ethereum, and Ripple, which are classified as bluechips in the cryptocurrency market.
As of December 9, 2020, Grayscale's total assets under management amounted to about USD 12.1 billion, of which Bitcoin Trust products (GBTC), in particular, accounts for about USD 10 billion. ). In October and November, about USD 1.2 billion was flown into the Bitcoin Trust product (GBTC), which strongly tied to the price and status of rapidly growing Bitcoin (BTC).
Currently, Grayscale holds 540,000 Bitcoins (BTC) and 2.7 million Ethereum (ETH). This, too, shows that Grayscale cannot be ignored in the current cryptocurrency market.
Currently, Bitcoin Trust products and Ethereum Trust products are registered with the US Securities and Exchange Commission (SEC) for disclosure. When Grayscale buys Bitcoin (BTC), it must formally file a form with the US Securities and Exchange Commission (SEC). On the other hand, having such a legal position has resulted in Grayscale's capital inflows and asset size more than doubled compared to before.
In the case of Bitcoin Trust (GBTC), Grayscale's flagship trust product, investors can invest with two means.
In the case of an investment in cash, the investor sends cash to Grayscale, Grayscale passes the funds to the authorized broker, Genesis, and Genesis is the spot market with Bitcoin ( BTC). The purchased Bitcoin (BTC) is sent to and stored in the cold wallet of Coinbase, a depository institution, and the Bitcoin Trust (GBTC) stock that rises in the investment amount is issued to the investor.
If you invest with Bitcoin (BTC), Grayscale will send the invested Bitcoin (BTC) to Coinbase and store it, and the Bitcoin Trust (GBTC) issues the corresponding shares to the investor.
Please keep in mind that, since the Bitcoin Trust (GBTC) product is obligated to report to the SEC as of January 2020, the stock held will have a six-month lockup period. It is the same as saying that you can freely sell in the over-the-counter market after 6 months.
The recent rapid growth of the Grayscale Bitcoin Trust (GBTC) can be interpreted as USa growing preference for Bitcoin US investors.
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