GBTC vs Bitcoin: What Is the Better Choice in 2024?

What Is Bitcoin (BTC)?

Bitcoin is the oldest and the most expensive cryptocurrency. Everybody knows that. So, we better move to some specific features.

Bitcoin was launched in 2009 by somebody known as Satoshi Nakamoto. That’s all we know about the founder. It’s not even clear if it was one person or a group of people.

Bitcoin is decentralized. This feature makes it different from all fiat currencies.

There are no physical coins. Coins exist as a code on a public ledger – blockchain. We can compare blockchain to a collection of blocks. Each block consists of transactions. The Bitcoin blockchain is stored on many computers – nodes. All computers have the same blocks and transactions. That’s why all the changes made in blockchain can be seen by all nodes. It makes the system very safe.

The coins are kept by using private and public keys. They are long strings of numbers created by an encryption algorithm. We can compare public keys with bank accounts. They are seen by all blockchain participants and used to receive funds. Private keys are used to prove that coins stored in the blockchain are yours. Private keys can be compared to a PIN code of your card. You provide a PIN code to access your money. In the case of Bitcoin, you provide your private key to access coins stored in the blockchain.

New coins are produced by mining. Mining requires solving highly complex computational puzzles and is extremely energy-demanding.

What Is Grayscale Bitcoin Trust Tokenized Stock FTX (GBTC)?

To avoid confusion, we need to clarify that here we talk about two phenomena: GBTC, or Grayscale Bitcoin Trust, and its FTX tokenized stock. So, let us check what they mean and how they are connected.

Grayscale Bitcoin Trust is a trust that offers to invest in Bitcoin. However, it is not the common sense of the word. In a trust, investors hold stocks. Stocks are shares in a company. And trusts hold physical commodities, gold for example. Grayscale Bitcoin trust holds Bitcoin only.

However, it is registered by the Securities and Exchange Commission (SEC) and is reporting to the Commission.

Now, the second part of the crypto comes – “tokenized stock FTX”. Stocks are not cryptocurrency. But stocks can be tokenized, and with it, they become a cryptocurrency and can be traded just like any crypto.

Tokenization is the process of creating digital tokens on a distributed ledger or blockchain. Tokens can represent any physical or digital assets.

And when stocks are tokenized on FTX (one of the major and the most innovative trading platforms), they are referred to as tokenized stock FTX.

GBTC vs BTC: Price

Many people believe that GBTC and BTC shall be traded at a more or less similar price. It is far from the truth. It is correct though that the GBTS price fluctuations follow the BTC price movements even though sometimes they are late to display the changes.

Another difference is that BTC is traded 24/7, while GBTC is traded only during standard market hours (from 6 a.m. to 5 p.m.) So, if the BTC price collapses at night, GBTC investors won’t be able to sell their stocks on time to save at least some funds.

GBTC vs Bitcoin: Technical Aspects

Bitcoin is a cryptocurrency. It has its own blockchain (the first blockchain in the world). The BTC’s aim was to replace fiat money by providing fast, effortless, and cheap transactions. Bitcoin is widely used by many online platforms.

Bitcoin has all the features of cryptocurrency. It is decentralized, it runs on its own blockchain, and it offers relatively cheap and fast peer-to-peer transactions. Bitcoin uses the proof-of-work consensus mechanism, and new coins are created by mining.

GBTC are stocks of Grayscale Bitcoin Trust. They are not cryptocurrency by themselves. Their tokenized form is cryptocurrency. The GBTC price changes follow the changes of the BTC price.

GBTC vs Bitcoin: What Cryptocurrency Will Be More Expensive?

For now, Bitcoin is much more expensive than GBTC. Considering that GBTC represents trust stocks, its price isn’t likely to reach the level of the asset it represents. Many investors understand that investing in Bitcoin and getting direct profit from the BTC price growth is much more convenient than investing in stocks and getting some income. In the latter case, the income will be just a small fraction of the benefits that one might get from investing in BTC.

Bitcoin is the most popular and the most expensive cryptocurrency. The BTC price is highly volatile. But the trend is bullish. During a little bit more than a decade, the coin price has made the way from less than one dollar to more than 60,000 (an all-time high was observed at the end of October 2021). The GTBC has never moved above 50 USD per coin.

Will the GBTC value ever reach the value of BTC? We doubt it.

FAQ

Is GBTC a good way to invest in Bitcoin?

Everybody has their own way of investing. Some prefer to invest in a cryptocurrency directly while for others, investing in a trust is the most convenient option.

Some specialists believe that investing in GBTC has more drawbacks than benefits. The trust manages your funds to get profit, and you get % from the received income. No income means no shares.

How many Bitcoins is a GBTC?

At the moment of writing, you pay 0.00789 BTC to get 1 GBTC. In October 2013, 1 GBTC was less than 0.001 BTC. The GBTC price is growing with the growth of the Bitcoin value and growth of interest of investors in the stock.

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