13 thousand bitcoins, retail investors are afraid of high, but gray is still buying every day

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Source: Hot Wheels Community

Two days ago, on the day when it broke through 138,000, I did a small survey on some (do you buy flatbread again today? Welcome to leave a message below). It seems that when the price keeps increasing, the big Some of my friends are still rational and cautious. In addition, they may be affected by the further decline of the defi cottage, and the surroundings are quieter.

But in the market on the institutional side, it seems that buying, buying, and buying has never stopped? Whether it’s at 9800 or 13000. .

Recently, the grayscale fund grayscale has begun to swipe the screen in the encryption circle due to the continuous growth of its position. A few months ago, we had a few special articles to talk about the mechanism of his home, and this issue will be a phased update.

First of all, we need to clarify one thing. The market always talks about gray-scale buying of coins. Gray-scale buying of coins makes it seem like it is a “branded dog house”, but in fact, behind its more than 400,000 positions are hundreds of overseas companies. Investment institutions, as well as many qualified investors and retail investors, are not a single entity.

Next, I will show you how to watch the grayscale position change.

How to look at it, domestic aicoin has a dedicated open interest index, as shown in the figure below:

1万3的比特币,散户恐高,灰度却还在天天买

Web page:

The above picture shows the trend in October. It can be seen that there has been an increase of about 24,416 Bitcoin holdings. In the past five months, a total of almost 120,000 btc has been added, which is almost 20,000 per month.

How is this data calculated? It is completely based on the total number of GBTC stocks on the official website * the number of btc corresponding to each share.

Here 497017200*0.00095341 is exactly the value of 473861 given by aicoin above.

The so-called grayscale buying coins every day comes from the changes in these two values.

There are still some problems here:

1. The total amount of GBTC often seems to be increasing for several days in a row. Is there a one-to-one correspondence with the actual increase in btc, or there may be some time difference? For example, if you see today’s increment, the transaction was actually completed as early as January or a few weeks ago, which we don’t know.

For the additional issuance of GBTC, there is also a stock website that can check the number of changes:

1万3的比特币,散户恐高,灰度却还在天天买

Below this SECfilings (document) column is the monthly change announcement of GBTC that has been reviewed by the SEC. Click on the above October 21st. You can see that the document clearly records the number of shares of this additional issuance and the corresponding number of bitcoins. And the total amount of GBTC as of October 20:

1万3的比特币,散户恐高,灰度却还在天天买

Careful children’s shoes can also compare whether this increase in number is consistent with the increase calculated by the total amount of GBTC above.

2. If you have secretly observed the data of Grayscale official website, you can find that its bitcoin per share, that is, the amount of physical btc corresponding to each GBTC share has been slowly decreasing. The first share corresponds to 0.001 btc, and today this value has dropped. When I reach 0.00095341, I don’t know what it means here. If it is a 2% deposit fee per year, it seems that the value is not right.

It is still a bit confusing here, which means that if you hold GBTC for a long time, the actual amount of btc behind it will gradually decrease.

So for Grayscale, the inflow of funds in it has indeed been increasing, but there may also be many unsolved mysteries. At least one question is whether we can think of the next step due to the increase in positions of Grayscale and institutions. Will there be no more crashes like 312 in the script?

I’m not quite clear, but we can still update our views on some issues with grayscale:

1. Regarding the increase in gray positions, most of the increase is due to institutional arbitrage

The gray-scale mechanism is a bit like a closed-end fund, which can only be bought and cannot be redeemed. The primary market, that is, the private equity above, can exchange GBTC shares through pie or usd. Only institutions and qualified investors (with annual income or assets reaching specific Conditions) can participate, this part of the locked position for six months, can not be redeemed afterwards, can only go to the secondary market for trading

The secondary market is the otc market as shown below:

1万3的比特币,散户恐高,灰度却还在天天买

Its threshold is much lower. Basically, you can have a stock account. Buying gbtc is the same as buying any stock. Because the primary market has a lock-up period, the flow out of shares is limited, and otc is more oriented to the crowd, so GBTC has long been Compared with our btc, there is a premium.

According to a previous statement in the market, for institutions, the long-term premium of GBTC provides them with opportunities for arbitrage between the primary and secondary markets.

They can either borrow btc for GBTC, wait six months for secondary selling, exchange for btc repayment, and earn a premium profit. The other is to buy btc for GBTC, and open short orders in the futures market for hedging to prevent lock-in periods. Price volatility is impaired. After unlocking, the premium profit will be acquired, and the buying will be closed. If this is the strategy, there is also a saying in the market that when a large number of unlocks expire (note that it is not a buying or unlocking), a large number of buying and shorting will occur. It is equivalent to increasing a large number of buying orders in the market in the short term, which will benefit the currency price to rise:

1万3的比特币,散户恐高,灰度却还在天天买

After searching the public opinion about Grayscale Funds in the next two months, I feel that most people are quite acceptable to this arbitrage argument, and there are also some evidence to support it. For example, 70% of Grayscale private equity institutions give bitcoin replacements, including crypto lending. The market has grown in the past year, and a wallet product is quite popular overseas, that is, you deposit the bits in your hand, and the annualization is at least 3-5 points.

I also felt arbitrage theory before, explaining why no matter what the price, the open interest is still growing, after all, institutions are usually not vegetarian, but this can not be a success.

However, no matter what the above is said, we do not know how substantial the arbitrage component is.

According to the gray quarterly report, more than 80% of positions are still institutional investment, so I think there may be arbitrage, but there should also be a considerable part of GBTC used by institutions, funds or some companies for long-term allocation. After all, they are At present, many overseas are a major channel for compliant access to encrypted assets.

For example, the ARKW fund of an asset management company called ARK has purchased GBTC many times this year:

You might think that they have allocated bits, but they actually bought GBTC.

There is also the Digital Currency Group behind Grayscale, which also holds at least 4% of GBTC’s outstanding shares. These are all long-term configurations (of course, I don’t know if the share of GBTC increases, is it their form of shareholder I also have to add positions from time to time).

This may be one reason why GBTC continues to be issued and flows into the second level, but the premium has always existed.

2. On the issue of gray premium

GBTC premium inquiry:

It can be seen that today’s premium is still 20.19%. Of course, the short-term changes in this premium are affected by market heat. Looking at this year’s situation, the premium is only a few points when the market is sluggish.

Judging from the current data, there are still 165,642,724 GBTC waiting to be unlocked in the next 6 months, which is about 150,000 btc, and this number is still growing:

1万3的比特币,散户恐高,灰度却还在天天买

Therefore, many people think that this premium will decrease with a large number of unlocks, or even become negative.

For closed-end funds, it is normal that the relative net worth is negative, but considering that many companies have configured GBTC above, this premium situation may be relatively reduced, but it will exist for a long time, and it may collapse due to too many unlocks. It won’t happen, because if it is really lower than the value of holding bitcoins, it will attract more buying. After all, the market now defaults that there are so many bitcoins bound behind it.

3. Why are so many retail investors willing to take over GBTC in the secondary market?

(1) People can access Bitcoin without worrying about storage security, compliance or taxation issues . It is a very complicated process to pay taxes overseas with encryption.

(2) There are tax incentives for purchasing GBTC . Many overseas pension accounts not only do not need to consider tax payment, but also have tax incentives. The transaction fee is also very low. Some foreigners in the circle sometimes choose to trade GBTC instead of BTC.

(3) It can be purchased directly through a stock account. For stockholders, it is cumbersome to open an account on a digital exchange or use a wallet for storage. Just like eth holders, it is difficult to open an eos wallet account. Then directly use the existing account to buy this tracking fund. It is a very common choice, even if it may have premium risks and high depository fees, from a certain perspective, it can be regarded as a very successful “cross-chain”.

The above three points are relatively official explanations. There is also a very amber explanation, that is, there are also many retail investors speculating on this GBTC because of its volatility. When the market is strong, its return rate is higher than that of the bit. It has risen by 39% in one month, while btc is almost 21%.

4. About redemption

As mentioned above, gbtc, including other encrypted assets such as eth and ltc, has no redemption mechanism. Why not, mainly because it does not comply with the legal regulations of the SEC. The SEC is also very interesting. Many of their regulations are The implementation has not changed since 1930, but the problem is now in the 21st century. [laughs and cries]

This also means that as long as the coins invested in the first level are locked up for a long time!

Seeing this, do you think. . But I still want to say that first of all, Gray’s current holdings accounted for more than 2 points in circulation. This ratio does not seem to be considered to determine the price. Secondly, it transfers a part of retail buying demand. What I bought, I ended up buying gbtc. This is the case overseas.

In addition, it’s hard to say whether this is permanent or not. Maybe someday it will become a “thunder” that everyone agrees. And overseas ETFs have never been approved. This product can be bought and redeemed, and with so many institutions The focus on encryption may be passed at some point, and it may also change the state of grayscale buying coins every day.

Conclusion

Regarding the gray scale, this article has a lot of chatter. If you don’t understand or feel the above need to be corrected, please leave a message below.

For grayscale, on the positive side, it is really Amber’s best “cross-chain” linking to more overseas investors and institutions, but on the negative side, it also “castrates” cryptocurrencies. , When more users only care about price fluctuations and regard it as a financial product, and even know how to transfer money with it, I don’t know whether this is good or bad for the future.

ps It seems that these currencies are bought and bought overseas, and they are stored in the cold storage of coinbase. I don’t know if his cold storage is cold enough, just in case. . Yeah, what will happen.