Why the Bitcoin Price Is Even Higher Than You Think

Bitcoin is sitting at US$3,407 according to coinmarketcap.com, close to its all-time high of around US$3,500.

But on one particular exchange, it is sitting at US$5,290. That’s a 55% premium some bitcoin investors are willing to pay!

There’s a reason for this. And it’s something I touched upon in yesterday’s Money Morning.

It’s the reason why I think there is a ‘Euphoria Stage’ boom in cryptocurrencies still to come.

Bitcoin hype is everywhere at the moment. Normally this would indicate signs of a bubble. But, because of the newness of cryptocurrencies, there is a gap between interest and actual investment.

Technically, it is not that easy to buy a cryptocurrency. There is a whole new language around this brand new asset class. You have to learn about wallets, private keys, storage and new units of currency.

This has reduced the normal conversion rate such hype generates.

Fund pumping up Bitcoin Price

Enter the Grayscale Bitcoin Investment Trust [OTCQX:GBTC].

This registered fund lets you buy units that represent 1/10th of a bitcoin. They buy it and store it for you. And charge you a 2% fee for the privilege.

Right now, one unit is selling for US$529. In other words, 10 units (equalling one bitcoin approximately) are US$5,290.

That’s a 55% premium people are willing to pay for the comfort of buying in their usual manner.

I know that sounds crazy, but the facts are there for all too see.

Once more mainstream concepts are brought to market to make it easier for the interested masses to invest in cryptocurrencies, prices could rocket up.

As always, remember that cryptocurrencies are still a high-risk, speculative investment. But a small punt now could potentially pay off nicely in the next few years.

Good investing,

Ryan Dinse,
Money Morning

Why Ethereum Could Be the One Coin to Rule Them All..find out here 

Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

Ryan's premium publications include:

Money Morning Australia