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There was an article I read on how arbitrage vs BTC was possible, despite it not being an ETF. I forget the details, it may have taken like 6 months to do the e
by perl4ever 6y ago
There was an article I read on how arbitrage vs BTC was possible, despite it not being an ETF. I forget the details, it may have taken like 6 months to do the exchange for regulatory reasons.
So professionals were making money while it was >BTC, until they overdid it and the premium went away.
It seems reasonable to be patient because there's just a lot of lag in the system as it's currently set up.
If you've ever paid attention to closed-end funds, you might have noticed how they can trade substantially over or under asset value for quite a while, but not forever.
- qeternity 6y agoThere’s no arbitrage in the strict sense but basically it’s just a straight convergence trade without a delivery mechanism. Just need funding, which is abundant today.
- perl4ever 6y agoThere's no arbitrage in what sense? The article I read that called it arbitrage described it like this: "[Hedge funds] borrow Bitcoin, deposit the coins with GBTC in exchange for shares that are more valuable than the coins they bought, and they pocket that profit by selling the marked-up shares after a six-month lockup period expires." Unlike an ETF though, the shares can't be destroyed. And suddenly the premium went away, so probably some of the people who were counting on it to remain have quit now.