Grayscale Bitcoin Investment Trust has made its shares vastly more accessible through its decision to split each one into 91 parts. This has resulted in a surge in price at the start of the week as investors take advantage of the increased affordability.
More affordable, more accessible and reduced risk
Grayscale Bitcoin Investment Trust (GBTC) owns 0.09 bitcoin for each one of its shares, with its value seeking to imitate that of bitcoin’s. The stock was trading over $1,000 before the split took place in January 2018, and sold for $18 each thereafter.
In practical terms, for each share held before the split, the investor would have had 91 shares afterward. Those not previously invested would be able to buy smaller increments than previously able to, allowing a reduced point of entry for new investors.
Moreover, the lower price allows a new income bracket of people to participate through the ability to purchase what is essentially a fraction of one of the previous stocks. This comes as an attractive option for those not willing or not able to part with a larger amount of capital, partly due to affordability, or partly due to an apprehension towards investing in an asset as volatile as bitcoin.
The new ability to benefit from the flagship cryptocurrency’s surges while carrying a reduced risk has served as a swing-vote for those on the fence, and the market has responded to the increased flood of demand with a slightly increased price to match. The highest record share price after the split of $19.57 is equally attractive, however, with demand not slowing on the Bitcoin-parallel investment.
GBTC, Cryptocurrency, and Millennials
GBTC’s market value was unaffected by the split and is still hovering at approximately $3 billion. As a testament to its popularity, it comes in at second place when the most frequently traded stocks on Stockpile are analyzed.
Stockpile is a widely used mobile application that facilitates trading, with a claim to fame of offering fractional shares of stocks at a fee of $0.99 per trade. The application has gained a large following in the millennial demographic, as its attractive affordability allows entry into the stock market with an investment of just $5.
Indeed, the cryptocurrency market as a whole has generated a large interest among millennials, as the cryptocurrency bridges the gap between low-income investors and traditional, high entry point investment methods.
At the time of writing, bitcoin was trading at $10,343 per coin. With the figure sitting almost equally far between its lowest and highest points in 2017, there has been much fear in the market that the bitcoin bubble may eventually be bursting. The sharp dip has been linked to the implementation of South Korea’s trading ban, despite government officials explicitly stating that it would not occur.
The Success of other Cryptocurrencies
Although bitcoin has dropped in value of late, the same cannot be said for every cryptocurrency. Even as many continue to rise, experts state that the future of cryptocurrency may not be in cryptocurrency itself, but rather the underlying blockchain technology behind it.