Is GBTC a Safe Investment?

In this video, I discuss whether GBTC is a safe investment, and how it compares to owning Bitcoin directly.

I do not like GBTC, for the following reasons:

1) 2% annual management fee
2) Impossible to know where the premium/discount of GBTC to BTC will be when you need to sell
3) Owning GBTC means that you need to rely on Grayscale and Coinbase Custody to keep your Bitcoin secure. If they get hacked, you are out of luck. SIPC or FDIC insurance will not cover you, and it appears that Coinbase Custody does not carry sufficient insurance to cover everyone if there is a big hack.

Becoming a Bitcoiner means learning to assert your own monetary sovereignty. This means to stop relying on the Fed, the government, or the traditional financial system to keep you or your wealth safe.

Not investment advice! Consult a financial adviser.

Grayscale Bitcoin Trust:

Grayscale Bitcoin Trust SEC registration:

Coinbase Custody FAQ:

My favorite Bitcoin dashboard:

How to get Bitcoin into your IRA:

I like to buy Bitcoin using Coinbase and Trezor:

How to buy Bitcoin (tutorial):

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[sunchips]

GBTC is now trading at a huge mouthwatering ~25% NAV discount. That should be a motivator to buy GBTC. I can also invest it into a low maintenance IRA and diversify how my asset is secured, given that I already have a significant amount of BTC self sovereigned through through pure cold storage and also a hardware wallet.

[prodigy]

The recording is looking amazing without the dock! A+++ content as always. You're the only channel I have with the notifications turned on. Thanks Matt for taking the time to make these.

[nilg]

Good content and very clear in all aspects. Thanks for sharing your views.

[BDK]

Thanks for this helpful video. Just to be certain, this 2% accruing fee on GBTC is 2% of my total assets in the trust, correct? So if I only invest $1, 000, the annual fee would be $20, perhaps a little more if there's growth? Probably a stupid question. I'm just starting out with investing. Thanks for your time.

[Moonphish]

I was interested in Grey Scale not for btc but I want to invest in the up and coming products like the metaverse and it's too much information for me to sift through. Do you have any suggestions on how to get guidance for this?

[TheMotoKing]

Great video and for older people it may be easier for GBTC.

[kwirky]

The only advantage for GBTC is that you can buy it in your IRA. You can even trade around the premium if you are good at it tax free.

[tonybegg]

I agree with all the worries. I believe the BTC underlying GBTC is stored in cold storage wallets though, and judging by how many BTC Grayscale have been buying they probably *do* have the BTC to back their GBTC. At the moment there is no other vehicle for tracking BTC in a Fidelity IRA, despite Fidelity having set up a Digital Assets group. I expect at some point there will be an ETF backed by BTC approved by the SEC (who feel to me way behind the curve on crypto and I don't know what their problem is). GBTC is definitely not ideal (I have BTC outside my IRA in "cold storage") with the 2% fee and the premiums. Also, when a BTC backed ETF is available the premium on GBTC will decrease to be competitive with that of the ETF so that is a risk. The premium has a very definite behavior - when BTC is decreasing in price it gets smaller - I have bought at 7% and as low as 3.5% - it is one of the things I monitor when adding to my position. When BTC is on a roll the premium expands to about 20%, so clearly when one has decided to sell one needs to do it when the upward price momentum is high. Like most people with GBTC, I suspect, we hold it because there is no alternative within a conventional IRA at the moment.

[JasonLee-qjts]

what if you don't have any other option... if i want exposure in my retirement accounts... gbtc is the only path

[lancetschirhart]

then buy it at a discount and sell it at a premium?

[buckhorn]

I moved a portion of my 401k into a self directed, qualified plan entirely based on Vulcans Video. I first heard about it from one on Matt’s video months ago. Bought all of it in BTC 7-8k. Getting ready to move some more.

[sagig]

Great video Matthew. Thanks for making this about GBTC.

[utubefun]

Great content! Love your videos. I just subscribed. Thank you!

[TomBabula]

Is there a risk if genuine BTC ETFs come out, GBTC will drop in price?

[志強-jt]

Could you discuss about ETHE ？ thank you ~

[TheBriansle]

I entered the BTC space back in 2013. Its amazing to see how far we have come in a decade. Products like GBTC are the next step towards a full-out ETF. Why is GBTC a great investment? It allows you to get exposure to BTC price mvt through your IRA. What does that mean? You have trade BTC's price mvt tax-free within in your IRA. That's huge. Do you guys have any idea how risky it is to trade BTC on exchanges like Binance? Hell, I used to trade BTC on BTC-E back in the day. The FBI shut that down.
By buying GBTC you are buying a fraction of their giant pool of BTC and now can trade, safely in your Fidelity IRA. That's what you are paying the 2% fee for. Membership into their little trust club. Sell when BTC tops 100k then rebuy later.

[kenmiller-lopez]

Going off Andy Liu's comment below, if you could earn interest on your bitcoin, how come you wouldn't do it/suggest it? I'm just starting to read into this now, so I don't know too much about how bitcoin interest works, but if you plan to possibly never sell your bitcoin, it sounds like a good idea to earn interest on it because it would make it easier to retire on your bitcoin investment from the steady stream of income it would provide without selling any of it. What parts of how interest on bitcoin works do you not like? Thanks for the information you provide every day!

[jonitalia]

So basically if GBTC owned every bitcoin and got hacked for all 21 million bitcoins, customers can only get $12.14 per bitcoin of insurance. Ouch.

[JamieRebecca]

I didn't have to ask to be upgraded to coinbase pro. I made a coinbase account and then was able to transfer that to pro.

[michaeltran]

Good vid, Matt. All good points on GBTC. I know there’s been a lot of focus on Bitcoin. What is your view on the effects of the presidential election if one candidate wins versus the other? Would appreciate a video on this.