Since the publication of PlanB articles, the Bitcoin value proposition has gained a sort of validation based on a solid model, which proved with rigorous maths the rhetoric of “Bitcoin is valuable because it is scarce”.

This made Bitcoin Investment viable for a series of actors, who were ready to embark in a series of legal, regulatory and fiscal hassles to get long exposure to bitcoin. Others will inevitably follow, but those who embarked in this venture earlier gained market shares and profits in a less than competitive market.

One of the most discussed amongst these funds is Grayscale.
The huge amount of bitcoin they bought has drawn attention from the community. Be it because a signal if institutional adoption, or a measure of scarcity of bitcoin  when measured against mined bitcoin.

I think many concepts about this fund have been oversimplified, and a few technical details of the inner functioning could better serve a global understanding on how this fund works, how it is used by institutional investors,  be it “fiat investors” or whales, and by retail investors.

Given the fact Grayscale was very often commented in the news, some insightful reports, and a very good thread in the italian board, I decided to go with a thread detailing some of the main aspects, going thru some finer details, trying share what I have learned in the process.

During all this article I will refer to this spreadsheet, where you can see the details of many of the computation. You can open it and play with it.

Thank you to the fellow italian members who discussed on GreyScale thread by Plutosky on their local board.