Understanding the Grayscale Bitcoin Trust
GBTC is a digital financial instrument designed to offer individuals interested in cryptocurrencies exposure to the Bitcoin market, eliminating the need for direct acquisition of the underlying asset.
Grayscale pioneered Bitcoin (BTC) accessibility by introducing the Grayscale Bitcoin Trust (GBTC), marking the inception of the first-ever Bitcoin fund of its kind, enabling investors to access BTC through a familiar investment vehicle.
Launched in September 2013 as a private, open-ended trust for accredited investors, it represents a diversified collection of pooled investor money with the capability to issue an unlimited number of shares.
The GBTC obtained Financial Industry Regulatory Authority (FINRA) approval in 2015 to trade publicly, allowing investors to buy and sell shares under the ticker symbol GBTC. The trust passively invests solely in BTC, offering investors exposure to BTC as a security without the complexities of directly buying, storing and securing Bitcoin. GBTC shares are designed to track the BTC market price with lower fees and expenses.
Initially accessible only as a private placement, GBTC started trading publicly on the over-the-counter (OTC) market OTCQX in 2015, following the alternative reporting standard for companies not obligated to register with the United States Securities and Exchange Commission (SEC).
Modeled on popular commodity investment products like the SPDR Gold Trust, which is a physically backed gold exchange-traded fund (ETF), GBTC expanded its offerings to include trusts for Ether (ETH), Litecoin (LTC) and other cryptocurrencies
