Buy The Rumor, Sell The News May Not Apply To Bitcoin - Grayscale Bitcoin Trust - Grayscale Bitcoin Trust

This piece was originally published on December 22nd, 2023.

There’s an old saying on Wall Street, “buy the rumor, sell the news”. There’s often some truth to it. Professional investors tend to be forward-looking and buy stock ahead of an event. Once the event takes place, their reason for owning it disappears, and they sell. I’m seeing a lot of talk both on Twitter/X and in today’s Wall Street Journal about how Bitcoin will fall after the SEC approves ETF applications.

Bitcoin has always been volatile, and a price decrease can happen at any time including after SEC approvals are secured. Still, I see this one differently. Many institutional investors and pension funds are required to only own assets that can be held in a brokerage account. I’ve spoken with a number of wealth advisors and RIAs who say their compliance departments won’t let them buy $GBTC (OTC:GBTC) right now. That means they have no way to get their clients direct exposure to Bitcoin.

ETF approvals would change that. Multi-trillion-dollar asset managers like Blackrock and Fidelity would be freed and encouraged to take advantage of institutional money that wants exposure to one of the best performing assets of 2023, and to something that provides counter-exposure to the continually debased fiat dollar. In this case, the news would be an event which would free large firms to market Bitcoin ETFs and allow financial advisors to finally get their clients some exposure.

As of now, Bitcoin issuance is about 900 coins a day. That will be cut in half in the next few months. So, we have a decreasing supply issuance ahead of a real possibility of a large increase in demand. The only thing that can adjust is the price. I can’t tell you if the next 20% move in Bitcoin is up or down. I can tell you that the reasoning behind the old “buy the rumor, sell the news” saw doesn’t make sense to me in this case.

[email protected] if you have any questions.

Information contained in this report is believed by Deep Knowledge Investing (“DKI”) to be accurate and/or derived from sources which it believes to be reliable; however, such information is presented without warranty of any kind, whether express or implied and DKI makes no representation as to the completeness, timeliness or accuracy of the information contained therein or with regard to the results to be obtained from its use. The provision of the information contained in the Services shall not be deemed to obligate DKI to provide updated or similar information in the future except to the extent it may be required to do so.

The information we provide is publicly available; our reports are neither an offer nor a solicitation to buy or sell securities. All expressions of opinion are precisely that and are subject to change. DKI, affiliates of DKI or its principal or others associated with DKI may have, take or sell positions in securities of companies about which we write.

Our opinions are not advice that investment in a company’s securities is suitable for any particular investor. Each investor should consult with and rely on his or its own investigation, due diligence and the recommendations of investment professionals whom the investor has engaged for that purpose.

In no event shall DKI be liable for any costs, liabilities, losses, expenses (including, but not limited to, attorneys’ fees), damages of any kind, including direct, indirect, punitive, incidental, special or consequential damages, or for any trading losses arising from or attributable to the use of this report.

This article is from an external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

GBTCGrayscale Bitcoin Trust (BTC)

$49.23-0.22%

Overview

Market News and Data brought to you by Benzinga APIs

To add Benzinga News as your preferred source on Google, click here.