Saturday, September 18 2021

A division of the First Midwest Bank of Chicago increased its Bitcoin exhibition last month, a deposit with the United States Securities and Exchange Commission showed.

The bank, founded in 1933, now holds more than 27 Bitcoin through the Grayscale Bitcoin Trust (GBTC) – a regulated institutional product offered by Grayscale investments who owns a fraction of Bitcoin per listed to share, allowing investors to be safely exposed to the asset.

First Midwest previously held 7,693 GBTC shares as of March 2021. However, it appears buy the dip with its increased exposure, holding more than 29,498 GBTC shares (≈ $ 910,000) as of June 30.

GBTC, Bitcoin and market dumps

GBTC, a popular institutional vehicle for trading Bitcoin, is a regulated financial product offered by Grayscale Investments, a multi-billion dollar crypto firm.

The publicly traded product holds a small amount of Bitcoin in a deposit account for every share offered to investors, forming what is currently one of the only ways for US accredited and institutional investors to legally gain exposure to Bitcoin.

As noted on its website, each GBTC share currently holds 0.00094 BTC, which is just over $ 30 at the time of publication. The stock itself is trading at $ 27 with a discounted premium charged by Grayscale (this is determined by market factors such as demand for its product).

Who buys GBTC?

First Midwest is not the only bank to invest in Bitcoin through GBTC. Earlier this month, Morgan Stanley, the U.S. multinational bank, report a holding of 26.5 Bitcoin via the institutional product (as part of its Europe Opportunity fund).

Meanwhile, while GBTC allows institutional investors to gain exposure to Bitcoin, some point to the many “unlocks” as potential turning points in the wider market. As CryptoSlate reported this month, JPMorgan said Bitcoin could drop to $ 25,000 after GBTC is unlocked later this month.

“While weak flows and price dynamics resulting from last month’s sell-off fueled recent declines in Bitcoin, possible sales of Grayscale Bitcoin Trust shares at the expiration of a six-month lock-up period could be an additional hurdle, ”wrote analyst Nikolaos Panigirtzoglou in a client note.

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