The Widow Maker
Unlike the other ETF’s, which are actually a rational way to own the underlying commodity, this should make any GBTC shareholder shit in their pants.
GBTC cannot even get insurance on their holdings, as per their last SEC filing, June 30, 2017.
As stated in the last SEC filing:
“We have been advised that our Custodian did not renew its insurance coverage. If our Custodian fails to adequately insure the bitcoins in its custody, this may negatively impact our ability to operate and an investment in the shares.”
At the time, Bitcoin was trading at $2,200. If they couldn’t get insurance at $2,200 per coin, they definitely can’t get it at $4,200.
The quarterly filing goes on and states directly:
“There is a risk that some or all of the Trust’s bitcoins could be lost or stolen . bitcoin transactions are irrevocable. … Stolen or incorrectly transferred bitcoin may be irretrievable.”
This whole vehicle can go to ZERO if there is a: Rogue employee, Computer Error, or Successful System Hack. The filing also warns insurance has become “Unavailable for our Custodian.”
If something is so dangerous that it uninsurable, do you want to own it? Worse, do you want own a fund that owns it, while paying a price 70% higher than what the underlying asset is actually worth?
Cautious Investing to All