<\/p>\n
The crypto market is suffering from a “fundamental mispricing” at the moment, says Jonah Van Bourg. <\/p>\n
In traditional finance, more than enough capital exists to “pre-hedge pretty much any type of announcement or anticipated information that’s widely known,” but this is not the case in crypto, according to Van Bourg.<\/p>\n
On a recent 1000X podcast (Spotify<\/a>,apple<\/a>), Cumberland’s global head of trading spoke to Avi Felman, the head of digital asset trading at GoldenTree, about the potential value of Grayscale’s GBTC<\/a> compared to its current price.<\/p>\n \u201cThe best trade in crypto is long GBTC<\/a>he says.<\/p>\n But, he admits, it all depends on hopes for the SEC to approve a spot bitcoin ETF<\/a>which isn’t fully priced-in yet, he says.<\/p>\n \u201cThere just isn’t enough money that can get into crypto to pre-position for what a BlackRock ETF approval would bring in.\u201d<\/p>\n Van Bourg says that buying bitcoin now \u2014 spot or GBTC \u2014 enables anyone to “get ahead of a potential BlackRock ETF approval.”<\/p>\n The reason why the price of bitcoin (BTC<\/a>) “isn’t up in a probabilistically weighted way already,” Van Bourg says, is because “it’s hard for capital to get into crypto right now.”<\/p>\n Traditional finance struggles to attain direct exposure to crypto on a larger scale because of “restricted pathways,” he says. \u201cSo I think GBTC is the best trade.\u201d<\/p>\n Felman agrees, noting that GBTC is among his current “favorite trades in the world.”<\/p>\n Grayscale-issued GBTC shares allow traditional investors to gain indirect exposure to bitcoin and avoid the hassles of physical custody. Rather than personally holding digital assets in a crypto wallet, traders can leave the daunting responsibility to Grayscale. <\/p>\n Since the Grayscale Bitcoin Trust does not yet enjoy status as an ETF, GBTC currently trades well below bitcoin’s market value as it cannot be directly redeemed for the underlying bitcoin asset. <\/p>\n An SEC approval of BlackRock’s spot bitcoin ETF could spark a series of similar approvals, including Grayscale’s proposal<\/a>, Such a change would remedy the share-to-bitcoin imbalance and allow for 1:1 redemption.<\/p>\n But Felman has a “cynical take” on this potential outcome. \u201cI don’t think the ETF drives truly meaningful flows.\u201d<\/p>\nThe cynical take<\/h2>\n