What is GBTC premium?

The GBTC premium refers to the difference between the value of the assets held by the trust against the market price of those holdings. GBTC products usually trade at a premium cost to the current value of the holdings or net asset value since it is a regulated path to Bitcoin exposure and is backed by institutions.

What is the discount to net asset value in GBTC shares?

The discount to net asset value is now roughly 30% in GBTC shares. That GBTC discount rate is actually so steep at this point, that many of Grayscale's altcoin funds actually have less severe discount rates than GBTC and even price premiums in some cases:

Why is GBTC a good investment?

The premium makes GBTC or another trust bought at a low premium a potentially profitable bet (even better than BTC or the other coin themselves). This is because if crypto goes up hard, which it sometimes does, the premium can expand and magnify your gains!

Should I buy GBTC shares if I don't understand the premium?

As a rule of thumb, if you don’t understand the premium, you shouldn’t be buying shares of GBTC or another trust. This is especially true with new trusts as they can tend to trade at a very large premium when they launch and sometimes even higher sometime later (see LTCN as an example).