GBTC Stock Split: Understanding the Implications for Bitcoin Investors
The Bitcoin Investment Trust (GBTC) split 91 -1. This move will make GBTC’s price better reflect the price of Bitcoin and will make GBTC more affordable for smaller investors.[1][2]
Essentially now when Bitcoin is $10k, GBTC’s Native Asset Value should be about $10.
- Pre-split each share of GBTC represented about .092 bitcoins, so you needed 10.89 shares to own one Bitcoin worth of GBTC.
- Post-split each share represents just under .001 bitcoin. Specifically, you’ll need 991.15 shares to own one Bitcoin worth of GBTC.
That math is easier to do and it’ll be easier to see the current GBTC premium (the difference between the Native Asset Value and the cost of GBTC on the market).
This doesn’t mean much of anything for GBTC holders. However, one should note that stock splits like this that lower the price can result in more buyers. A week ago you had to shell out about $1.7k to buy a single share, today you can buy a share for about $19 (it would have been $18, but the stock went up in price after the event).
GBTC demand is really high, but so is the premium. This premium and demand helps show us that demand for Bitcoin is high. Bitcoin may be struggling a bit on the crypto exchanges, but on stock exchanges that let their customers choose GBTC, we see a demand and price much higher than on the crypto exchanges.
BTC the crypto today trades for about $11k, GBTC trades for $19k. Does this mean the traditional investor is demanding $20k Bitcoin while the crypto investor is being more bearish? That is one way to look at it.
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