The best trade in crypto right now is ‘long GBTC,’ Van Bourg says

The crypto market is suffering from a “fundamental mispricing” right now, says Jonah Van Bourg


Ascannio/Shutterstock modified by Blockworks


The crypto market is suffering from a “fundamental mispricing” at the moment, Jonah Van Bourg says. 

In traditional finance, more than enough capital exists to “pre-hedge pretty much any type of announcement or anticipated information that’s widely known,” but this is not the case in crypto, according to Van Bourg.

On a recent 1000X podcast (Spotify/Apple), Cumberland’s global head of trading spoke to Avi Felman, the head of digital asset trading at GoldenTree, about the potential value of Grayscale’s GBTC compared to its current price.

“The best trade in crypto is long GBTC,” he says.

But, he admits, it all depends on hopes for the SEC to approve a spot bitcoin ETF, which isn’t fully priced-in yet, he says.

“There just isn’t enough money that can get into crypto to pre-position for what a BlackRock ETF approval would bring in.”

Van Bourg says that buying bitcoin now — spot or GBTC — enables anybody to “get ahead of a potential BlackRock ETF approval.”

The reason why the price of bitcoin (BTC) “isn’t up in a probabilistically weighted way already,” Van Bourg says, is because “it’s hard for capital to get into crypto right now.”

Traditional finance struggles to attain direct exposure to crypto on a larger scale because of “restricted pathways,” he says. “So I think GBTC is the best trade.”

Felman agrees, noting that GBTC is among his current “favorite trades in the world.”

Grayscale-issued GBTC shares allow traditional investors to gain indirect exposure to bitcoin and avoid the hassles of physical custody. Rather than personally holding digital assets in a crypto wallet, traders can leave the daunting responsibility to Grayscale. 

Since the Grayscale Bitcoin Trust does not yet enjoy status as an ETF, GBTC currently trades well below bitcoin’s market value as it can not be directly redeemed for the underlying bitcoin asset. 

The cynical take

An SEC approval of BlackRock’s spot bitcoin ETF could spark a series of similar approvals, including Grayscale’s proposal. Such a change would remedy the share-to-bitcoin imbalance and allow for 1:1 redemption.

But Felman has a “cynical take” on this potential outcome. “I don’t think the ETF drives truly meaningful flows.”

A significant amount of flow into bitcoin could be offset by GBTC owners who finally redeem their shares and exit bitcoin altogether, he says. “There are funds right now that own GBTC outright and will, when approved, drain GBTC of their Bitcoin and get out of the trade.”

“Yes, there are a lot that own GBTC in a market neutral fashion, but there are a lot that own it outright, basically willing to take the price risk of bitcoin,” Felman says. “And when that gap closes, they’re out.”

All of this conjecture depends on a spot bitcoin approval, Felman admits. “We’re talking as if the ETF is definitely going to get approved.”

“But I think we’re at an inflection point where it becomes an institutionalized asset class and it becomes something that is just not going away.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research



Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.


Also, former Valkyrie CEO lands new leadership role at Canadian investment firm Cypherpunk Holdings


This week’s biggest funding round saw Jump Trading, JPMorgan contribute to the round


Plus, a layer-1 for intellectual property is launching and Farcaster users peaked


Crypto still hasn’t shaken one of its most garish primordial tails — funny stories about fraud


Plus, publicly traded crypto companies had a pretty eventful news week


Committee members directed more questions to Christy Goldsmith Romero, who could soon be leading one of the more troubled federal agencies