Blow To Bitcoin As U.S. Investment Trust Tanks
Story by: Billy Bambrough
Bitcoin has been struggling in 2018, losing more than 60% of its value so far this year after 2017’s massive bull run, and the only bitcoin investment trust in the U.S. is doing even worse.
Grayscale Bitcoin Investment Trust’s (GBTC) shares are down around 80% since December last year — wiping billions of dollars from its market capitalisation.
The Bitcoin logo is seen on an Apple iPhone in this photo illustration on September 24, 2018. (Photo by Jaap Arriens/NurPhoto via Getty Images)
GBTC’s valuation decline has been blamed on its expense fees, according to a Bloomberg report.
The trust charges $20 for every $1,000 invested, which works out at 2%, compared to the average equity mutual fund expense ratio of just 0.59%, according to the Investment Company Institute.
“Expense ratios are insane for these funds and the current bitcoin price is creating more problems,” London-based chief market analyst at TF Global Markets, Naeem Aslam told Bloomberg.
But the way investors are buying into bitcoin and cryptocurrency is changing.
It has been reported institutional investors, such as hedge funds, earlier this year replaced high net-worth individuals as the biggest buyers of bitcoin and cryptocurrency transactions worth over $100,000.
Traditional investors and hedge funds have reportedly become more involved in the $220 billion crypto market through private transactions while miners have begun scheduling regular coin sales instead of holding or offloading them during market rallies
Original story by: https://tinyurl.com/yc38rwer
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