My perspective on the current GBTC situation? Here's my understanding, although I acknowledge that I might be mistaken.
GBTC had accumulated around 600,000 bitcoins. When ETFs were introduced, GBTC was optimistic about maintaining a 1.5% fee, significantly higher than the typical 0.25% charged by others. This led to investors with tax-advantaged accounts like IRAs and 401ks swiftly liquidating their GBTC holdings in favor of these lower-fee ETFs.
For those with GBTC in regular brokerage accounts, the scenario is a bit more complex. Selling their GBTC holdings now would incur taxes over 20%, making their decision more intricate. A massive volume of GBTC is being sold, primarily to reinvest in ETFs with lower fees.
There are individuals who purchased GBTC when the discount to the actual bitcoin price was much smaller. Just a year ago, GBTC was available at about a 50% discount. Those who capitalised on this are now seeing GBTC transform into an ETF, which narrows this discount, presenting a profitable exit opportunity.
The essence of this situation is that there's a significant movement of bitcoin and funds due to these developments. This transition period is expected to be prolonged. Generally, there's a belief that there's a net positive influx into ETFs, but it will take time for the market to absorb the GBTC sales, reminiscent of the 'bear whale' event from the past.
