awesomo10

GBTC PREMIUM TO NAV WITH ACTUAL BTC PRICE OVERLAYED

GBTC             PREMIUM IS GREATEST WHEN BTC             PRICE IS RIPPING AND GBTC             PREMIUM IS LOWEST WHEN BTC             PRICE IS TANKING. GBTC             TAKES THE SENTIMENT SHIFTS IN EUPHORIA AND DESPAIR AND EXACERBATES THEM, AS IT REPRESENTS A LESS SOPHISTICATED SECTION OF THE MARKET WITH LESS INVESTMENT RESOURCES. IF ONE BUYS ON A BTC             PRICE DIP WHERE THE GBTC             PREMIUM TO NET ASSET VALUE CLOSE TO 30%, THE EUPHORIA THAT IS LIKELY TO FOLLOW WILL SERVE AS A STRONG TAIL WIND IN THE FORM OF A WIDENING PREMIUM AS THE UNDERLYING PRICE INCREASES. MAY BE EVEN BETTER TO BUY GBTC             THAN BTC             ON DIPS DESPITE ABSURD PREMIUM, PARTICULARLY IF THERE IS NO BITCOIN             ETF IN THE CARDS FOR THE NEAR FUTURE. ASSUMING DISCOUNT TO NET ASSET VALUE IS UNLIKELY AND 100% PREMIUM TO NET ASSET VALUE IS POSSIBLE, RISK/REWARD FAVORS BUYING AT UNDER 30% PREMIUM TO NET ASSET VALUE
Comment: Change in the tides... Unsophisticated retail traders who use GBTC as their bitcoin investment vehicle seem to be adjusting to the wild swings in Bitcoin. Large movements in bitcoin price seem to have less of an effect on premium to Net Asset Value shifts in GBTC, than they once did. This seems bullish as it may be indicative of a growing volatility tolerance to newcomers in the space. Premium almost always above 50% now which is an absurdity for any investment product. GBTC not a viable investment vehicle for cryptocurrency. Recommendation: Buy Bitcoin, put it on a Trezor and forget about it for the next 5 years. I am confident in this recommendation. Price target: +$50k
This is actually an amazing indicator. It completely leads the price of bitcoin. The dip below .30 in this indicator and then indicator rally prior to price is the tell. At least that is the pattern I see. Thanks for it. I love out of the box stuff like this.
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How did you graph the premium?
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@Broom, GBTC premium to net asset value was calculated as GBTC Price/(Coinbase Bitcoin Price*0.00100231)-1


0.00100231 is the amount of bitcoin per share in GBTC according to the grayscale website= https://grayscale.co/bitcoin-investment-trust/


Multiply that by the real price of bitcoin and you'll get the net asset value per share of GBTC. Divide GBTC last trade price by net asset value per share of GBTC and you'll get GBTC premium to net asset value expressed over 100%(maybe 150%)... subtract 1 and youll get premium to net asset value expressed properly..

For example if Bitcoin is $7350 and GBTC is $11.93, premium to net asset value is 11.93/($7350*0.00100231)-1==0.619 or GBTC is trading at around a 62% premium to its net asset value.
+1 Reply
Broom awesomo10
@awesomo10, Thanks man, I'm showing that it's 52% according to your chart. Is this right? Just want to make sure I'm reading it right. I agree, this is a great trading opportunity when buy with low premium %.
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@Broom, No problem. For whatever reason, this chart doesn't update as dynamically as I'd like it to, but 52% is about right. You are reading it correctly
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Broom awesomo10
@awesomo10, Any idea why the formula isn't visible in TV to me?
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@Broom, No clue. I'm a fixed income trader and this is the only time I've ever used tradingview. I use tradestation as my charting platform. There is a blue hyperlink under the chart title on this site that says BITCOIN INVESTMENT TRUST that takes me to the formula via this link: https://www.tradingview.com/symbols/spread/OTC%3AGBTC%2F0.0010721%2FBITFINEX%3ABTCUSD-1/

bitcoin per share on GBTC has changed slightly since i made this chart due to inflows/outflows from the fund, management fees, etc., but again, underlying themes of the chart remain the same.
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what is the formula to for gbtc premium?
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awesomo10 anacondabitch
@anacondabitch, GBTC premium to net asset value was calculated as GBTC Price/(Coinbase Bitcoin Price*0.00100231)-1


0.00100231 is the amount of bitcoin per share in GBTC according to the grayscale website= https://grayscale.co/bitcoin-investment-trust/


Multiply that by the real price of bitcoin and you'll get the net asset value per share of GBTC. Divide GBTC last trade price by net asset value per share of GBTC and you'll get GBTC premium to net asset value expressed over 100%(maybe 150%)... subtract 1 and youll get premium to net asset value expressed properly..

For example if Bitcoin is $7350 and GBTC is $11.93, premium to net asset value is 11.93/($7350*0.00100231)-1==0.619 or GBTC is trading at around a 62% premium to its net asset value.
+1 Reply
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