While Bitcoin (BTC) itself remains further into the mainstream in terms of popularity, however, there are more options for investors to profit from its price action — either buying Bitcoin directly or through investment in investment funds such as the Grayscale Bitcoin Trust (GBTC).
While both approaches aim to track the value of Bitcoin, the two are significantly different in terms of structure, accessibility, risk, and fees.
This in-depth breakdown compares Bitcoin vs GBTC, explains what Grayscale Bitcoin Trust is, does, and looks into whether GBTC is what your digital asset investment portfolio needs.
What Is Grayscale Bitcoin Trust (GBTC)?
Grayscale Bitcoin Trust (GBTC) is an exchange-traded fund developed by Grayscale Investments. Established in 2013, GBTC allows traditional investors to gain exposure to Bitcoin without holding or owning the cryptocurrency itself.
The trust holds actual Bitcoin directly on the investors’ behalf. Rather, the investors purchase shares of the trust, which are designed to track the value of Bitcoin.
GBTC is listed on the OTCQX over-the-counter exchange with the ticker GBTC, and as of 2024, it is now a spot Bitcoin ETF following a significant court victory over the SEC.
Key Features:
- One share is a fraction of one Bitcoin.
- GBTC was the initial crypto fund to register as a reporting company with the SEC.
- It initially was a closed-end fund, typically trading at a premium or discount NAV.
- It later became an ETF in 2024, with improved liquidity and price reflectiveness.
Bitcoin vs GBTC: The Key Differences
Although both are attempting to follow the price of Bitcoin, there are considerable differences between holding Bitcoin (BTC) directly versus purchasing GBTC.
| Trait | Bitcoin (BTC) | Grayscale Bitcoin Trust (GBTC) |
| Ownership | Direct ownership of Bitcoin | Ownership in a trust holding Bitcoin |
| Storage | Requires crypto wallet | No private key or wallet needed |
| Type of Trading | 24/7 on cryptocurrency exchanges | Market hours only (U.S. stock exchanges) |
| Fees | Exchange & network fees | 1.5% management fee (ETF structure) |
| Promotional/Discount to NAV | Actually traded at market price | Actually traded earlier at promotional/discount |
| Tax Benefit | Complicated tax rules | May be realized in tax-deferred vehicles (IRAs, 401(k)s) |
| Security | Possession of self; vulnerable if not secured properly | In possession of Grayscale |
| Protection against Regulation | Less regulated | Regulated, publicly traded investment |
Invest in Grayscale Bitcoin Trust
Investing in GBTC is easy, particularly for those who are already comfortable visiting traditional brokerage websites. Following is how to invest in GBTC:
Step-by-Step:
- Open a brokerage account – Utilize websites such as Charles Schwab, Fidelity, TD Ameritrade, or E*TRADE.
- Find GBTC – Type in the ticker symbol (GBTC) on the trading website.
- Purchase – Like an ETF or share, enter the number of shares and fill the order.
- Keep track of performance – GBTC is an ETF and can be monitored as one on your portfolio.
Pro Tip: GBTC is investable in retirement accounts (IRAs) and thus a long-term, tax-benefited investment vehicle.
Past Performance: GBTC Stock Price
The GBTC stock price has been highly volatile, owing to:
- Bitcoin price movement.
- News about regulation.
- Premium/discount to NAV.
- Market sentiment and liquidity.
Key Milestones:
- 2017 Bull Market: GBTC skyrocketed, trading at a huge premium.
- 2020–2021 Rally: GBTC appreciated in parallel with Bitcoin, hitting new all-time highs in early 2021.
- 2022–2023 Bear Market: GBTC traded at an all-time discount to NAV — more than 40%+.
- 2024 ETF Conversion: Having won its lawsuit, GBTC was converted into an ETF, ending the discount.
While GBTC has correlation with Bitcoin, its historical price action has trailed or outpaced Bitcoin by virtue of premium/discount mechanisms.
GBTC Stock Investment Pros and Cons
Whenever you are thinking of investing in a cryptocurrency, or you are differentiating between two cryptocurrencies, the pros and cons are the first thing that you should evaluate before anything else.
Pros
- Ease of Access: Purchase through typical brokerage accounts.
- No Crypto Wallets Required: Easy for non-technical investors to use.
- IRA and 401(k) Qualified: GBTC is an investable IRA and 401(k) asset.
- SEC-Regulated: Safer than a crypto exchange.
- Spot ETF Conversion: Enhances liquidity and reduces discount.
Cons
- Management Fees: GBTC charges around 1.5% annual management fee, above average ETF.
- Premium/Discount Risk: May not represent actual value of underlying Bitcoin.
- Limited Trading Hours: Traded only during U.S. market hours.
- No Redemption: GBTC can’t be redeemed for actual Bitcoin.
Grayscale vs. SEC Lawsuit: Impact on Spot Bitcoin ETF
In 2022, the SEC dismissed Grayscale’s application to convert GBTC to a spot Bitcoin ETF, and Grayscale sued as a reaction. The court dismissed the grievances in August 2023, ruling that the SEC had acted arbitrarily.
Lawsuit’s Impact:
- GBTC was legally converted to a spot ETF in early 2024.
- Discounts to NAV were greatly minimized.
- The ruling opened doors for other Bitcoin spot ETFs, allowing industry clarity.
- GBTC became more competitive with funds like BlackRock’s IBIT and Fidelity’s FBTC.
This legal victory was a watershed moment for crypto and traditional finance integration.
Alternatives to GBTC as an Investment
If you’re seeking crypto exposure but want more options beyond GBTC, consider the following alternatives:
1. Bitcoin Spot ETFs
A Bitcoin ETF is an investment tool that helps you track the price of Bitcoin. They are traditionally traded on regulated security exchanges, but they are not available on cryptocurrency exchanges.
- BlackRock’s IBIT
- Fidelity Wise Origin Bitcoin Fund (FBTC)
- ARK 21Shares Bitcoin ETF (ARKB) These ETFs will have lower expenses and improved tracking accuracy.
2. Bitcoin Futures ETFs
Bitcoin futures EFTs are basically a pool of bitcoin-related assets that are offered on traditional exchanges by brokerage to trade as ETFs.
- ProShares Bitcoin Strategy ETF (BITO)
- Traded futures of Bitcoin instead of owning Bitcoin directly.
3. Crypto Exchanges
Crypto exchanges are privately-owned platforms from where you can trade on crypto currencies for other crypto assets which includes NFTs, etc.
- Buy Bitcoin directly on exchanges such as Coinbase, Binance, Kraken.
- Involves management of private keys and wallets.
4. Crypto-Related Stocks
Access the stocks other companies that work in the digital asset and cryptocurrency ecosystem.
- MicroStrategy (MSTR) – Holds big amounts of Bitcoin.
- Coinbase (COIN) – Big cryptocurrency exchange.
All substitutes have trade-offs in fees, custody, access, and exposure levels.
The Future of Grayscale Bitcoin Trust (GBTC)
GBTC has evolved from being an over-the-counter trust to a regulated spot ETF. Its future will be:
- Fee slashing to be competitive with new entrant ETFs.
- Product growth – Grayscale also has Ethereum and other crypto trusts.
- Institutional flows, as GBTC is now liquid and transparent.
- Growing competition, particularly from household-brand behemoth players such as BlackRock.
But its brand name, reputation, and early mover in space place it firmly in the crypto investing universe.
Bitcoin vs GBTC FAQs
Here are a few frequently asked questions that people have asked on the topic bitcoin vs GBTC, that you might find helpful.
1. Is GBTC the same as Bitcoin?
No. GBTC is a financial product that is tracking the price of Bitcoin. It does not give you actual ownership of real Bitcoin.
2. Can I exchange GBTC for Bitcoin?
No. GBTC can’t be exchanged for real Bitcoin.
3. Is GBTC a secure investment?
It’s safer on the protection by the regulators side than unregulated cryptocurrency exchanges, but it’s still at risk of market risk.
4. How much does GBTC cost?
Currently, as of 2025, GBTC has a 1.5% annual management fee, but that can be lower later.
5. Can I buy GBTC inside my Roth IRA?
Yes. Another benefit of GBTC is that it can be kept inside tax-advantaged accounts such as Roth and Traditional IRAs.
Bitcoin vs GBTC: Which Is The One For You
When it comes to both Bitcoin vs GBTC, they provide investors with a vehicle for benefiting from crypto economy growth — but in fairly different ways.
- Bitcoin (BTC) is ideal for those looking for ownership, custody, and are prepared in the world of crypto.
- GBTC, particularly now in its revised ETF form, is ideal for conservative investors wanting straightforward vanilla Bitcoin exposure within their brokerage accounts.
As long-term regulatory innovation, ETF acceptance, and institutional investment continue to rise, both BTC vs GBTC can have their place within a diversified investment portfolio — based on your investment horizon, risk tolerance, and technical acumen.
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