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If you're interested in getting invested in the digital currency world, now seems to be as good a time as ever. Bitcoin has seen repeated record-setting price levels, and a host of other digital currencies are becoming increasingly popular around the globe. And yet, there are some reasons why even seasoned investors may be reluctant to get involved in direct investments relating to cryptocurrencies. Fortunately for those people, there is an over-the-counter trust focusing on Bitcoin in particular that can simplify the process. It is called the Bitcoin Investment Trust (GBTC) and it is provided by Grayscale Investments. Here are some of the basic details about the new trust and its relationship to the digital currency itself.

Significant Returns Already

The Bitcoin Investment Trust has won a spectacular set of gains over the past year. According to MicroCap Daily, the trust was trading for less than $100 just one year ago, while in the intervening time it has risen to more than $1000. It has finally settled back to about $800 as of this writing. The trust's success mirrors that of Bitcoin, and that makes sense: the trust is exclusively tied to that cryptocurrency, and its value is derived solely from that of Bitcoin.

Why the Huge Premium for GBTC?

Potential investors are likely wondering why GBTC shares can be found at such a high premium over Bitcoin. The issue seems to lie in supply and demand. While Bitcoin demand has skyrocketed, GBTC has kept its shares outstanding close to 1.7 million in the two years that it has existed. In fact, the ETF seems unlikely to change the number of total outstanding shares in the future, according to the company's head of research, Ihor Dusaniwsky. He explains that "it is unlikely that GBTC's outstanding share amount will climb above 1.7 million anytime soon."

This is not to say that there aren't significant concerns about GBTC as well. Andrew Left of Citron Research has publicly criticized the trust, and Seeking Alpha speculates that his statements may be linked to GBTC's cratering premium relative to Bitcoin, possibly due to investors having sold off their shares in a rush of skepticism. According to Citron, GBTC marks the "most dangerous way to own Bitcoin."

It is useful to note that GBTC didn't always seem this expensive in comparison with Bitcoin. Before Bitcoin's price spiked in the past several weeks, the trust traded on an average premium of just 10% above the crypto currency in 2017. The issue seems to have come about when Bitcoin's demand blew up and GBTC's supply did not change. As Bitcoin continues to spread further into the financial world, it will be interesting to see where GBTC's share prices go as well.

GBTC is traded on OTCQX.

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