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Gate.io Research : The Major Impact of GBTC and other Cryptocurrency Trust Funds on the Market and their Future Evolution
Gate.io Research : The Major Impact of GBTC and other Cryptocurrency Trust Funds on the Market and their Future Evolution
2021-02-02 19:41:55 UTC
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Abstract：Cryptocurrency trust funds have been an arena for capital and have attracted a lot of attention due to the booming Bitcoin market. The premium of the Grayscale Bitcoin Investment Trust (GBTC) created attractive arbitrage opportunities for investors which helped it lead the way in the market. As an investment product under the supervision of compliance, GBTC was far more investable than many other traditional financial products in 2020. A growing number of institutions have already flocked into the market. Some institutions began to buy or hold trust fund products, while banks, as a representative of traditional finance, were also taking part in independent node verification networks and custody services.
Key points：
- The Premium caused by the design concept of GBTC is key to the product and is also a crucial point that attracts investors. Revising the design to reduce the premium will not necessarily optimize GBTC;
- Other cryptocurrency trust fund products under Grayscale and other companies are not strong enough to threaten the status of GBTC as a leader in the industry;
- Cryptocurrency trust funds in 2020 were more likely to be funded than conservative underlying investments such as gold and treasury bonds. Compared with other high-yield financial products, the cryptocurrency trust funds, as new products, do have an obvious advantage in terms of yield;
- Venture capital institutions and traditional investment institutions have set their eye on cryptocurrency trust funds one after another. Financial institutions are also gradually preparing for more trust fund products, and banks have begun to serve as custodians and participate in stable currency nodes;
- The cryptocurrency trust fund is more likely to expand towards multiple forms in the future and maybe a valuable tool to hedge against inflation. It is thought that it might reach its peak in the next two years. The trust fund, as a compliant investment channel for cryptocurrency, will certainly be widely recognized. It can achieve diversified and differentiated targets, mechanisms, and functions.
Disclaimer: Based on the due diligence and objective analysis by internal staff, the research draws a conclusion based on the observed market data. However, it should not be treated as the sole basis of any investment.
The report will be uploaded soon. Please stay tuned!
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Gate.io Team
Feb 2rd, 2021
