Cryptocurrency Investments: Bitcoin Investment Trust (GBTC)
No matter how great bitcoin and ethereum are, they do have serious vulnerabilities. Chief among them is the ever-present threat of hacking. Digital currency accounts have been breached before by online thieves, and it certainly won’t be the last time this occurs. Depending upon the brokerage’s policy, there may be little to no recourse. Certainly, if you store bitcoin in your computer, there’s zero recourse if your computer is compromised.
That’s because the technology that makes digital currencies so quick and convenient is also its Achilles’ heel if it is violated. Digital transactions are recorded on the blockchain, but they are completely anonymous. Therefore, it’s possible to run up huge profits, only to be undone by a hacker. For those that want to participate in the ebb and flow of bitcoin, but without its inherent pitfalls, there’s Bitcoin Investment Trust (OTCMKTS:GBTC).
GBTC is the world’s first publicly traded bitcoin fund, according to The Wall Street Journal. For all practical purposes, GBTC is still the only viable digital currency investment that operates within the traditional stock market platform. That has obvious advantages. For one, GBTC is a damn fine performer. Last year, it hauled in more than 82% in profits. And as previously mentioned, GBTC is a “protected” investment. Sure, the over-the-counter markets can be hacked, but you are legally entitled to the shares of GBTC that you purchased, period.
That said, the GBTC takes the fun out of digital currencies. Namely, 24/7 trading. No more staying up at 1 a.m. analyzing candlestick charts — with the GBTC, you are bound to the rules and time frame of the stock market. That’s like running contemporary software on outdated processors.
Still, digital currencies are a new concept, and that naturally entails risk. GBTC allows interested parties to take baby steps toward this exciting development.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. However, he is a proponent of digital currencies and accepts bitcoin for his business.