Bitcoin

How does Grayscale Investments sell Bitcoin to financial advisors?

In a webinar hosted by InvestmentNews, Grayscale Investments CEO Michael Sonnenshein and financial advisor Tyrone Ross Jr. informed financial advisors about the benefits of cryptocurrency investments.

A slide from Sonnenshein's presentation.

A slide from Sonnenshein’s presentation.

How does Grayscale Investments sell Bitcoin to financial advisors?
How does Grayscale Investments sell Bitcoin to financial advisors?

Grayscale offers with its Bitcoin Trust (GBTC), by far the largest, ten crypto-related investment products. It currently owns around 400,000 BTC, although the demand for the product has decreased recently.

Bitcoin physical representations questioned

He spent a lot of time with some of the more well-known aspects of Bitcoin, such as the limited supply and the immediate settlement options. Sonnenshein also made the public aware that the physical representations of the asset are not real:

“And one thing that is important to all of you as a consultant and in the investor community is that you often see physical adjustments or representations of Bitcoin. In fact, however, there is no tangible bitcoin. “

Transfer of wealth to millennials

Sonnenshein brought to the table Millennials seem to have quite an appetite for Bitcoin. Some surveys have been cited:

“There have been other studies by Bankrate and Edelman and ETF Trends that we have seen that millennials are five times more likely to invest in Bitcoin. <...> [o] The percentage of younger generation is actually used for cryptocurrency, or we hope to do so in the short term. “

Clarity of regulations

Another important issue was regulation. Sonnenshein admitted that in the past, lack of regulatory clarity prevented investors from entering the room, but in his opinion, this is no longer a valid excuse:

“But we have come to the conclusion that this can no longer be an excuse for investors.”

He found that the IRS has designated Bitcoin as property and the Commodity Futures Trading Commission guidelines have allowed robust futures markets and even the Federal Reserve to be compared to gold.

Mussels, coinbase and solid planning

Ross intervened and explained to the audience that it doesn’t matter whether they think Bitcoin is a shell. It is crucial that they give their customers good financial advice:

“I don’t care if they think they’re shells or whatever, that’s fine. But at least if the customer comes to you, hey, I have some on Coinbase, you can give them a very precise answer, why this doesn’t make sense, or why you want to articulate it further in a financial plan, or a fair quarterly financial plan. “

Accredited investors can buy directly without a premium

Sonnenshein answered one of the existential questions of the community about the GBTC: Why is there such a high premium compared to the BTC spot price? He explained that accredited investors can buy newly issued GBTC shares directly from Grayscale at net asset value. The premium is determined by the supply and demand from GBTC on the secondary markets. He also found that the cryptocurrency products offered by Grayscale allow investors to engage in digital assets without having to deal with entry barriers such as wallet management.

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