Saga is a Layer 1 blockchain protocol that allows developers to design their own dedicated chains for running applications. Learn more in this article.

 universe right now is the lack of accessible tools for developers. Many people interested in designing new 

 projects struggle to find the right software developer kits (SDKs) for their projects. The Saga ecosystem aims to fix this issue by providing unparalleled support to app and game developers. 

Can the Saga ecosystem really become the premier chain for web3 development? Keep reading to learn how it works and see whether it's likely to attract new developers.

 blockchain protocol. It allows developers to design their own dedicated chains for running applications. People who work on Saga all share the same security, scaling solutions and SDKs, but they each get their own unique chain that they can customize to suit their needs.

 of technology, crypto and finance enthusiasts. CEO Rebecca Liao is a co-founder of the Skuchain project, the designer of the 

 and a former international corporate attorney. Other members of the founding team include former Tendermint executive Jin Kwon, Blocktech Ventures founder Bogdan Alexandrescu and 

. They realized that there was a major need for a development-focused blockchain specifically designed for game project development. Saga's mission has attracted many major investors, 

Saga aims to create a new system for web3 project developers. Currently, most developers have to choose between the ease of working on an established chain like 

 versus the convenience and customization of designing their own chain. The Saga team realized that the most effective option for game developers would actually be a combination of the two types of development environments.

Saga wants to let developers set up their own sovereign blockchain so they can decide how things like 

 and transaction fees work. However, Saga also aims to provide extensive support for developers in its ecosystem. Its underlying framework ensures that people still have excellent security and a reliable validator set, no matter what their gaming project is.

 ecosystem, whose interchain web development standard is a set of protocols that allows a broad variety of blockchains to communicate with each other. The Saga network uses the 

 and the shared security system of the Cosmos ecosystem to manage the network, and has created its own Layer 1 chain that runs the entire Saga ecosystem and can do things like automatically launching 

The Saga Mainnet handles each developer's compiled smart contract binary. However, it also runs parallel dedicated chains that function as virtual machine (VM) modules capable of handling a specific set of smart contracts. End users for blockchain games and other apps interact only with the dedicated blockchain, while the developer's system manages the fees and individual transactions on the Saga Mainnet.

All of the chains on Saga are validated through optimistic coordination, which requires every Saga validator to validate each chain in the Saga ecosystem via 

 validation, verifying transactions by temporarily locking Saga tokens.

The Saga network contains a lot more than just the basic features offered through the Cosmos SDK and ecosystem. In addition to the software development tools and helpful interface for Saga's validators and developers, the ecosystem also contains the following features.

The overall layout of the Saga ecosystem starts with the Saga Mainnet. Built on the Cosmos hub, this framework includes a full validator set and a dedicated blockchain for handling all smart contracts. The basic protocols are passed on to each child chain in the system, and information is relayed back and forth between the main chain and all of the secondary chains. Saga's validators stake tokens, and then check to make sure every element of the topology follows Saga’s regulations.

 are a method for creating a dedicated blockspace that a developer can manage. These chainlets function as virtual machines that can handle smart contracts and automatically launch Celestia rollups. Each chainlet is its own blockchain that handles nothing but a specific gaming project. Developers decide on the gas fees they'll charge users, and can add chainlets as their projects expand and require more throughput from the remaining validators.

Saga's shared security relies on both the Cosmos hub and its own set of validators to secure the network. Validators on Saga’s network are monitored by auditors who can catch potential issues with individual dedicated chains. If anyone in the validator set fails to properly confirm a smart contract, their staked tokens are automatically confiscated.

 is a publishing system for gaming developers who want to create their own blockchains with help from Saga. It offers infinite scalability, seamless 

 and transactions without gas fees. In addition to use of the Cosmos SDK, developers who choose to publish their game through Saga Origins receive access to a variety of helpful marketing and distribution tools.

 is an interconnected blend of all the developers and projects in the Saga system. Though each sovereign blockchain is fully independent of others, they all join together to offer users a variety of exciting web3 projects. People interested in checking out the latest blockchain designs can join the Multiverse and browse all the neat concepts built on Saga.

To help get the Saga validator system started, Saga released 

 to its community members. People were eligible for the 

 if they had participated in the staking program or played in tournaments to promote Saga ecosystem games. The airdrop eligibility period required remaining validators and other participants to be active between January and October of 2023. Once the airdrop began allowing people to claim tokens, it continued to run until Mar 27, 2024.

 consists of four separate phases. The company has already completed the Andromeda and Cassiopeia phases, which focused on designing the Mainnet and setting up the system of Saga validators. Currently, the Saga team is in the Pegasus phase, which is about releasing tokens and opening the Saga Mainnet to the public. Sometime in late 2022, Saga’s team hopes to reach their Mainnet V2 phase, which will prioritize a new version of the Saga Mainnet with more features and options for dedicated blockspace.

SAGA tokens are the primary method for paying fees on the Saga network. These tokens are also used for staking, and function as a method of confirming Saga transactions. There are a total of 

, of which around 90 million have thus far been released. Saga plans to distribute its tokens as follows:

SAGA is still in the early stages of its token launch. However, it’s already surprised investors, having debuted at $4.91 on Apr 9, 2024 before quickly surging to its ATH to date of $7.60. It then steadily declined over the next few days to its current price of $3.06 as of Apr 19, 2024.

 SAGA, with its experts believing SAGA’s price will reach $15.73 by 2025 and decrease in 2027 to $6.27, before rising again to $13.45 by 2030. This bullish sentiment is amplified by analysts at Changelly, 

 SAGA’s price will increase to $6.91 in 2025, $14.21 in 2027 and $44.36 in 2030.

Looking to trade Saga tokens? Bybit now offers SAGAUSDT Perpetual contracts. To get started, you’ll first need to 

, then fund it with cryptocurrency and navigate to the 

SAGA has done an extremely impressive job of attracting users, and seems poised to become the big coin debut of April 2024 with its high price.

However, it's hard to say whether SAGA can maintain its price in the long run. It's quite common for new startups to have a strong start and then drop in price once their project fails to take off. If the Saga ecosystem can’t attract new developers and continue to release impressive projects, investors could see some major SAGA losses in the future.

Since this coin is so volatile right now, investors need to 

. It has the potential for both big profits and big losses, so you’ll want to carefully consider how these price shifts might affect your portfolio. For best results, avoid investing more than you can afford to lose, make sure you diversify your investments — and 

By offering developers the chance to create their own dedicated chains, Saga offers a more convenient and scalable system for blockchain gaming. Its helpful features and low transaction fees have already attracted many people, and it's no surprise that many others are interested in the project. Furthermore, SAGA tokens have had a promising start with extremely impressive growth. If the Saga company can successfully capitalize on its early buzz, it has a bright future.

Intermediate

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Saga (SAGA): Catalyzing the Multiverse With Scalable Chains

Discover Masa, a platform empowering individuals to control and monetize their data, decentralizing AI storage and promoting ethical data sharing.

Few areas of the crypto industry are as popular these days as artificial intelligence (AI). AI-related tokens and projects experience some of the highest growth rates, with particular interest attached to generative AI technology and large language models (LLMs), all thanks to OpenAI's massively popular ChatGPT tool. This is no surprise, as blockchain technology has the potential to address many of the limitations of LLM algorithms, particularly those related to the issues of data and centralization of AI models.

The Masa network (MASA) is a new AI-focused crypto platform that brings a fresh paradigm to the world by allowing individuals to control and monetize their personal data. Its platform also contributes to the AI revolution by decentralizing the storage of both the user data and the LLMs utilizing it.

 (MASA) is a blockchain platform that provides access to user-consented, hyper-specific behavioral and personal data and decentralized LLM algorithms. 

The platform launched its operations on Apr 11, 2024. Masa operates as a subnet on the 

 (AVAX) blockchain. To enable cross-chain functionality, it has also integrated 

 technology. This lets Masa bridge assets, initially to two key blockchains, 

 (BSC), with additional chains to be added in the future.

Masa provides user-consented AI data that’s stored in a decentralized way. As of mid-April 2024, more than 40 million data points from over 1.4 million 

 user wallets are available via its permissionless data layer. Masa represents an entirely new decentralized AI paradigm: while most data providers use centralized storage solutions, its platform's data is always stored in a decentralized, blockchain-based format.

The data made available via Masa’s platform is user-consented for collection and privacy-protected using its Zero-Knowledge 

 (zkSBT) technology, which allows users to share their personal data securely and confidentially by storing this encrypted data on the blockchain. Thanks to the zkSBT, users can share fairly detailed personal data while protecting their identities and the specifics of their online activities.

This user-consented data is directly sourced from users through the Masa App and Masa Chrome browser extension with their consent. Users have complete control over their data, which is collected in a highly detailed, verified and ethical manner. 

As such, it's different from the typical user-aggregated data collected from the internet by companies. Compared to user-consented data, user-aggregated data tends to be less granular and, obviously, has ethical strings attached to it: in most cases, users don't consent to the collection of such data, or (at best) provide reluctant consent by clicking on annoying "Accept All Cookies" buttons.

While focusing mostly on user-consented data, the Masa platform also offers developers a way to access user-aggregated data for a richer data network. Using Masa's web data scraper, developers can extract data from websites, social media posts, blogs and online databases.

User-aggregated data is collected by data node workers via the Masa Oracle network and Masa Chrome extension and stored on the platform, benefiting from the 

In addition to datasets, Masa enables the decentralized execution of LLM algorithms, facilitated by the Oracle node workers, who leverage their surplus CPU and GPU computing power to run open-source LLMs for fine-tuning AI models.

The Masa project aspires to achieve goals crucial to the development of all data and AI industries. First, Masa allows individuals to completely control their own personal data by choosing what to share with the outside world while protecting their confidentiality. The blockchain-based storage mode also ensures the security of the stored data. Additionally, users can monetize access to their personal data, becoming a major beneficiary of its use.

All of these benefits are in stark contrast to the traditional way user data is collected, stored and used on Web 2.0 platforms. In this traditional mode, one is often unaware of what personal data is collected about them, as well as when and by whom. Although the data used for analytics purposes might be in an aggregated form, together with the details of other online users, individual users are still part of the "guinea pig" cohort whose details have been unceremoniously extracted and utilized without their knowledge or consent.

Moreover, when hit online with some fairly relevant advertising based on past search phrases, one begins to realize that data isn't always used in an aggregated format. In fact, its utilization can be quite personalized. And of course, in the traditional mode of data collection, we’re all rarely reimbursed for the data we share.

Another aim of the Masa project is to provide a secure and efficient decentralized infrastructure for running LLM algorithms. Traditional, centralized hosting solutions for AI models face challenges, such as technical capacity and security issues. For instance, many centrally hosted LLM-based solutions suffer from performance degradation when large numbers of users access them simultaneously. Masa's approach to leveraging decentralized resources for running open-source LLMs efficiently addresses these capacity limitations, providing enhanced scalability and reliability for AI applications.

Masa operates as a subnet on the Avalanche blockchain, using cross-chain communications supported by LayerZero to access other networks as well. Avalanche subnets are completely independent 

 networks with their own set of rules and functionalities. Subnets, including Masa, use Avalanche's validators, or a subset of validators, to secure the network and achieve consensus.

Besides the validators, the Masa network has another type of functional nodes — 

. These special Masa nodes play a critical role in providing structured data and advanced AI models while prioritizing data privacy.

The Masa Oracle network acts as a decentralized web scraper, gathering data from the internet and organizing it for AI training and development. This approach gives developers access to hyper-personalized training data to improve language model performance. It also supports the decentralization of LLMs, making them easily accessible without complex setup.

As mentioned above, users can manage access to and monetization of their personal data via Zero-Knowledge Soulbound Tokens (zkSBTs), which provide a secure way of providing access to users’ personal data without compromising their privacy.

 is the main gateway for users to interact with the Masa platform. It lets them provide access to personal data and earn crypto rewards by staking data in four different ways:

Masa’s native cryptocurrency, MASA, is a utility and 

 used to reward users for providing their data to the network. 

 MASA also earns you crypto rewards. Entities who wish to utilize data held by the network pay for access to it in MASA tokens. The token is also used to reward the Oracle nodes.

As a governance token, MASA lets you participate in votes on any changes and upgrades to the platform's rules or fee structure.

The token's supply economics doesn't specify a maximum cap. MASA's total supply is 1,588,866,523, which will be released gradually over a period of around four years starting in April 2024. Token supply allocation shares are per the table below.

The MASA token is available on Bybit via a 

. Bybit's Spot and Derivatives markets provide you with opportunities to trade hundreds of cryptocurrencies and crypto-based products. If you don’t have a Bybit account, you can easily 

 to access Bybit's range of crypto products and assets.

The Masa network is a refreshing addition to the data industry, whose user consent and privacy have been under attack for many years. The Masa platform puts data ownership in users' hands, allowing them to control access to their data and benefit from its monetization. As online privacy concerns and invasive Web 2.0 advertising shenanigans grow, more users will be attracted to Masa's unique data concept.

In addition to allowing individuals to control and monetize their data, Masa also contributes significantly to the development of 

, which is important because the decentralized mode of data and model storage championed by the platform has the potential to solve many technical limitations of LLMs and other types of AI algorithms. This is a network full of merit and promise; all it needs now is wider recognition and user adoption.

Advanced

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Masa (MASA): Powering AI With User-Centric Data Monetization

Today’s outperformer is LSK, which jumped 17.63% after Lisk partners with Velodrome to enhance blockchain access and drive ecosystem growth.

The SPX index is down 0.22% as the market anticipates less Federal Reserve rate cuts, considering the possibility of no cuts this year. The broader cryptocurrency market is up, with Bitcoin and Ether rising by 4.18% and 3.19%, respectively in the past 24 hours.

Lisk (LSK), launched on May 2016, is a cryptocurrency platform that enables developers to build decentralized applications (dapps) using JavaScript and TypeScript. It supports custom "sidechains" within its network, offering tools like a software development kit. Lisk has announced a partnership with Velodrome to support and expand its blockchain ecosystem. Lisk will purchase and lock $VELO tokens for voting, directing VELO emissions to key pairs on Lisk. This collaboration aims to support existing protocols on Lisk, attract new developers, and enhance blockchain accessibility and adoption in emerging markets. Velodrome will back Lisk's Layer 2 initiatives, aligning with the goal of creating a scalable, interoperable Ethereum future.

Check Out the Latest Prices, Charts, and Data of 

The Runes protocol is set to debut alongside Bitcoin's 2024 halving, heralding a new phase in Bitcoin's evolution by enabling the creation of fungible tokens directly on its network. This follows the impactful Ordinals protocol, which significantly expanded Bitcoin's functionalities. The Runes protocol will spark competition among developers to issue and acquire the first tokens, with global exchanges ready to support these tokens from day one. The halving event will also feature a race to mine a highly valuable "Epic" satoshi. As Bitcoin approaches this transformative era, extensive preparations and educational initiatives are underway to equip users for the forthcoming changes, marking a profound shift in Bitcoin's operational and cultural landscape.

Spot Bitcoin ETFs have yet another day of outflow, however, yesterday’s outflow was close to neutral. The market has seen fluctuating flows in these ETFs, with significant activity in some and none in others, reflecting mixed investor reactions. Recent substantial outflows echo trends from March, but analysts regard such fluctuations as typical for ETFs and not indicative of failure. Despite this volatility, the outlook for Bitcoin ETFs remains positive as they continue to draw institutional interest and shape market dynamics.

Avail, a blockchain data-availability protocol developed using Polygon’s SDK, has announced an airdrop of 600 million AVAIL tokens, marking its one-year anniversary since spinning off from Polygon Labs. The "Unification Drop" aims to bring together various blockchain communities by rewarding developers, governance contributors, educators, rollup users, stakers, and others who have significantly contributed to the ecosystem. Avail's infrastructure includes three segments: Nexus for cross-chain transactions, Fusion for liquid staking on chains like Ethereum and Bitcoin, and DA for scaling rollups through technologies like KZG commitments. The airdrop will distribute tokens to 354,605 wallet addresses and includes significant allocations for various roles across multiple blockchains, including Ethereum, Bitcoin, Solana, Cosmos, and more, emphasizing a unified Web3 environment.

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Runes Protocol Revolutionizes Bitcoin with New Token Capabilities Ahead of 2024 Halving

Nolus is a decentralized finance lending protocol with cross-chain capabilities. Learn more about how it works in this article.

One of the big advantages of decentralized finance (

) is that it provides more options for users. People who cannot get traditional loans because a typical bank deems them "high-risk" can turn to the DeFi sector to borrow crypto assets. The Nolus Protocol is a new DeFi lender that offers users all sorts of exciting opportunities. To see how this intriguing project works, explore this guide to learn all about Nolus.

 is a DeFi lending protocol. It has cross-chain capabilities that let people choose the most favorable rates possible and avoid the need to save up funds for liquidity.

Nolus was founded by Ivan Kostov and Kamen Trendafilov. Kostov worked in traditional finance, while Trendafilov has a background in marketing and business. During their time in these sectors, Nolus's founders realized that blockchain networks had the potential to revolutionize banking. They decided to join together and create a new leasing system that makes the most of DeFi products instead of just trying to mimic past banking methods.

Nolus started work on its plans in 2022 and officially launched its mainnet in 2023, having successfully completed several investing rounds and receiving 

 Token Metrics, Autonomy Capital, Everstake and more.

Nolus aims to tackle three problems common in crypto lending markets:

 software developer kit (SDK). Its code is entirely open sourced, and is updated and changed only when all stakeholders in the Nolus community vote to do so. According to the Nolus white paper, its ecosystem’s goal is “to build a novel user experience–driven automated money market” that facilitates direct interactions between lenders and borrowers without involving any other users.

The Nolus lending method starts with lenders choosing to supply 

 to the system. Any borrower who submits a down payment can get a loan from this supply of stablecoins. Both the coins and the down payment are 

, and interest is determined based on the value of the items. There’s no fixed repayment schedule, but the smart contracts ensure that interest is automatically removed from the collateral, and then paid to the lender at regular intervals. Once the user decides to repay the lease, the original assets are released from the smart contract.

Nolus's lending protocol includes many ways for customers to profit and enjoy convenient services. Here are the main DeFi products you can access through Nolus.

DeFi leasing on Nolus is designed to be as convenient as possible. Customers don’t have to go through a lengthy application or pay a lot of fees to other users. You just enter your collateral and get a loan of up to three times the value of the initial investment. Interest rates vary between 11% and 18%, based on the market value of the digital assets. The 

 allow the loan to be repaid on your own schedule. However, keep in mind that you pay more interest if you wait a longer amount of time to repay the loan.

If you want to earn money based on your existing crypto, you can join one of the many 

 on Nolus by submitting stablecoins in exchange for interest-bearing Nolus crypto. When you're ready to withdraw your funds and stop participating in DeFi leasing, you can cash out your Nolus tokens to receive your initial asset, plus any additional interest or network fees you’ve earned.

Nolus's system of money markets isn't the only thing they provide. Users who decide to 

 a crypto asset on Nolus can earn more money. The Nolus ecosystem offers the option of staking NLS tokens in exchange for various incentives. Lenders receive higher amounts of rewards for lending stablecoins, and borrowers get a lower interest rate.

Nolus has had some impressive growth since its launch in 2023. In just six months, the lending protocol has assisted with thousands of loans, collectively worth $8.6 million in total. Its team calculates that they've managed to achieve an average 

Nolus hopes to expand on this momentum in 2024. Its main plan is to continue marketing the lending protocol heavily, attracting more users who want to do their own research and find the best possible loans. To further attract users from the DeFi sector, Nolus aims to add more support for other crypto tokens and increase network liquidity. Nolus stands for community-led governance, so they don't have a long-term road map in place. Instead, they plan to evolve and adjust to suit whatever community needs arise in the future.

. It allows users to adjust their interest rates, and it's also a 

. People with NLS tokens can vote on how the platform is run and help implement new changes for the platform. The NLS token has a total supply of 1 billion. Nolus’s plan is to gradually mint tokens over a ten-year period, and implement a token buyback program to help maintain value. NLS token distribution will be as follows:

When the NLS token was released in the summer of 2023, Nolus prices were fairly stable. However, now that investors can sell their NLS tokens, prices have become more volatile. Starting in December 2023, NLS prices 

, and although the token currently seems to be dropping from its all-time high of $0.10, more price increases seem likely in the future.

Not only is the market for the NLS token quite bullish right now, but the Nolus lending protocol is also attracting a lot of positive attention in the crypto space. If the network can maintain its positive attention and attract more users, prices seem likely to rise even further. CoinCodex predicts Nolus prices will stay in the $0.04 to $0.19 range for 2025, and hit 

. This attitude is backed up by crypto influencers such as Crypto Revolution, 

 an underrated crypto with a lot of potential for growth.

The Nolus project is a well-thought-out crypto protocol that offers users significant advantages. Its innovative approach to lending could potentially attract a lot of users from the DeFi space. In addition to having a reliable system backed with effective technology and a detailed white paper, NLS digital assets have also experienced some promising growth patterns. The crypto asset has had a slow yet steady climb in price, and now that it's trending in crypto news, it seems poised to take off.

However, keep in mind that it's still important to 

 on digital assets. Some crypto investors might find it concerning that the Nolus project is mostly backed by marketers, instead of blockchain enthusiasts. There have also been some tech issues, such as the 

 that led to some unnecessary margin calls. Subsequent issues could limit price appreciation of its crypto assets. Therefore, it's necessary to approach Nolus with caution and not overextend your finances.

Nolus's DeFi lease system allows people to obtain easy access to crypto. Its innovative approach provides investors with significant advantages. Unlike traditional finance, there's no lengthy application process, and in contrast to many other blockchain networks Nolus doesn't have frequent margin calls or high network fees. As long as Nolus doesn't run into any technological issues or financial problems, its network is likely to have a lot of success in the DeFi space.

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Nolus (NLS): Crafting Liquidity's Future With Leading DeFi Leases

Bybit Learn

Investing

Bitcoin

GBTC is the world's largest Bitcoin fund and the first-ever publicly traded trust that has a digital currency as its underlying value.

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Grayscale® Bitcoin Trust (GBTC), an investment trust that’s traded publicly on the stock market, is a great option for individuals, companies and institutions unfamiliar with the crypto market who want to invest in Bitcoin without directly managing it.

But is it a good investment option for everyone else? Are you missing out if you haven’t invested in it yet? Are there drawbacks that might deter some people from buying Grayscale?

In this article, we’ll answer these questions and more.

) is the world's largest Bitcoin fund. It’s also the first-ever publicly traded trust that has a digital currency as its underlying value. If you don’t know what that is, here’s a quick rundown.

Trusts and funds on public stock exchanges have an underlying asset that dictates their value. These assets are mostly stocks in publicly traded companies. The price of the trust or fund fluctuates based on the underlying 

 (NAV), which is affected by the asset’s demand. An investor can buy a portion of the asset by purchasing shares in the fund.

Since GBTC is a cryptocurrency trust, you can 

 through your brokerage account. In doing so, you indirectly buy Bitcoin — avoiding the hassle of purchasing BTC through a 

. This means that you’re relying on Grayscale to buy and hold Bitcoin for you as a third party.

So the actual BTC is stored in the Grayscale institutional trust, and its retail index is traded on either the open or over-the-counter market. GBTC is similar to a crypto exchange-traded fund (

), as it pools investors’ funds to invest in Bitcoin and charges investors a management fee for investing in the fund.

How Does the GBTC Investment Vehicle Compare to a Bitcoin ETF?

, is a competitor of GBTC. That’s because ETFs track the market data or value of the underlying asset much more closely than a trust. Hence, the market price per Bitcoin ETF share is relatively close to the actual value of BTC.

But that’s not the case with shares of GTBC, because the trust charges an annual 

, and sometimes also a premium. That significantly increases the price of a GBTC share as compared to the market price of BTC while spot buying, or while buying shares of a Bitcoin ETF.

Currently, the crypto investment landscape is predominantly occupied by Bitcoin futures ETFs. These financial instruments allow investors to speculate on the future price of Bitcoin, but they don't necessarily offer the most accurate reflection of the asset's real-time market value. In contrast, GBTC has been proactive in seeking regulatory approval to transition into a 

 — a financial product that could revolutionize the way investors interact with Bitcoin.

Spot Bitcoin ETFs are designed to track the actual, real-time price of Bitcoin, providing a more immediate and accurate representation of the cryptocurrency's market value. Unlike 

, which are subject to the complexities of futures contracts and can deviate from the spot price due to factors like 

, spot ETFs aim to offer a one-to-one tracking of the underlying asset. This makes them potentially more reliable and straightforward for both retail and institutional investors.

Grayscale Bitcoin Trust gathers money, usually U.S. dollars (USD), from institutional investors and uses that to buy BTC directly. These BTC are stored in the Grayscale fund, which essentially makes the Grayscale institution — rather than its investors — the actual 

. You can then buy shares of GBTC and indirectly own BTC.

Ever since Grayscale became a publicly traded fund in 2015, various investors have poured a lot of cash into GBTC by buying Grayscale stocks during bull 

. Grayscale has used that capital to buy more and more BTC. Now, it’s accumulated over 643,572 bitcoins, which is 

 as of the time of this writing (Aug 31, 2023).

To put that number into perspective, Tesla holds approximately 10,725 BTC.

What Are Premiums and Discounts on GBTC Shares?

When you buy or sell GBTC shares, the trust doesn’t immediately buy or sell BTC with your investment. That’s where the concepts of premium and discount come into play, which are essential to learn about if you want to understand how GBTC works.

Suppose the Grayscale trust has about 500,000 BTC, which are all bought by shareholders. Then five investors come in, and each buys 1,000 BTC worth of GBTC shares.

Those purchases will raise the overall value of the trust by increasing the number of BTC held by GBTC investors as compared to the number of bitcoins owned by Grayscale as an institution. That’s because GBTC doesn’t immediately use the new investment to buy 5,000 more BTC.

This means that there’s a greater demand for GBTC shares than the supply of BTC. In such a case, the trust will add a premium to BTC’s value. Anyone who wants to buy GBTC shares will then have to pay that premium on top of the share value.

Similarly, if a bunch of investors sell their GBTC shares, the new investors will get a discount. This fluctuation means that you have to buy BTC at a different price than what you’ll get by buying directly from exchanges. That’s why GBTC share prices aren’t the same as the actual value of BTC.

Finally, you can only buy or sell GBTC shares during the opening hours of the stock market, unlike 

 buying and selling, which you can do at any time.

Grayscale’s Court Battle Against the SEC

Grayscale's legal battle with the U.S. Securities and Exchange Commission (SEC) began when the regulatory body rejected Grayscale's application to convert its GBTC into a Bitcoin spot ETF. The SEC's primary concern was the potential for market manipulation, a stance that Grayscale vehemently opposed. Unlike other asset managers who also faced rejection, Grayscale took the bold step of suing the SEC, arguing that the regulatory requirements for Bitcoin futures ETFs should similarly apply to Bitcoin spot ETFs.

On Aug 29, 2023, the U.S. Court of Appeals for the District of Columbia Circuit 

 in favor of Grayscale. The court found the SEC's decision to be "arbitrary and capricious," stating that the regulatory body failed to provide a sufficient explanation for its denial. This ruling effectively vacated the SEC's initial denial order and set a new precedent in the cryptocurrency investment landscape.

Following the court's decision, there was a notable uptick in trading activity surrounding GBTC, as investors anticipated a narrowing discount to Bitcoin's spot price. First, the price of GBTC shares increased from $17.58 to a high of $20.56, the highest since BTC reached $31,000 in the middle of July 2023. This 17% increment to its share price has narrowed its 

Following this, Bitcoin’s price surged from $25,960 to a high of $27,974. The impact extended beyond just Bitcoin, as the ruling also had a positive effect on the broader cryptocurrency market, where altcoins such as 

GBTC's recent legal victories against the SEC have not only increased the likelihood of its own conversion into a Bitcoin spot ETF, but have also paved the way for other Bitcoin spot ETFs to gain regulatory approval. This could mark a significant shift in the cryptocurrency investment ecosystem, offering a more precise and potentially less volatile investment vehicle for those looking to gain exposure to Bitcoin.

Pros and Cons of Grayscale Bitcoin Trust (GBTC)

To help you decide whether or not to invest in the Grayscale Bitcoin Trust, let’s look at its pros and cons.

Some advantages of buying GBTC stocks over owning Bitcoin directly include:

Crypto exchanges and wallets are vulnerable to 

. GTBC charges a management fee for keeping their BTC secure in cold storage, which is safe from hacks.

2. Regular Audits of the Bitcoin Investment Trust

 with the securities and exchange commission (SEC) to prove that it has the BTC that investors have paid for. That’s an advantage over crypto exchanges, which have the potential to scam people. An example of one such scam is the 

Investors can get tax breaks when they buy GBTC shares through 

, such as a 401(k) or an IRA. It’s also easier for investors to file taxes for publicly traded stocks of a trust that’s approved by the SEC.

Some drawbacks of owning GBTC stock are as follows:

GBTC charges a 2% annual fee. On top of that, you have to pay a premium to buy shares when demand is high. It’s not a good fit for smaller investors, because you need a minimum investment of $50,000 to buy into Grayscale Bitcoin Trust.

You can never redeem your shares for actual BTC because the Grayscale trust owns the private keys to the BTC in your shares.

The value of a GBTC share hasn’t been growing at the same rate as its underlying asset. Even if you don’t have to pay a premium, you still won’t earn as much profit by buying shares as you will by owning Bitcoin directly. From 2020 to 2021, GBTC’s share price 

 in value while BTC surged by nearly 340%.

 (PoR) with its customers due to security concerns, despite the global panic over the 

. This refusal has sparked public furor over the company's future.

Is Grayscale Bitcoin Trust a Good Investment?

GBTC may not be a good investment option because the value of GBTC shares doesn’t accurately match the value of Bitcoin. Prior to its win against the SEC, GBTC shares were trading at a record-low 45.08% discount to Bitcoin’s net asset value 

. Now that Grayscale has won its court battle, GBTC shares are currently trading at a discount of 19.51% (as of Aug 31, 2023). While the discount has narrowed significantly, it still doesn’t change the fact that if you purchase GBTC shares today, you’ll get fewer BTC than you would through spot buying for the same amount in USD. 

Investing in GBTC doesn’t give you voting rights on protocols, because you don’t own the 

to the BTC in your shares. Also, transactions occurring on the trust are censored by government agencies — which defeats the original purpose of a decentralized digital currency.

Perhaps in the future, if the shares start trading at a premium again, then Grayscale will be a good option for accredited investors who can purchase GBTC shares at the NAV price.

While Grayscale's recent legal victory against the SEC has been a game changer, it's essential to consider the broader context when evaluating GBTC as an investment vehicle. Historically, GBTC has been a go-to option primarily for affluent investors, given its premium pricing and unique structure. Moreover, the trust has been under scrutiny for its lack of transparency, particularly its unwillingness to disclose proof of reserves. This has raised legitimate concerns about the trust's overall credibility and risk profile.

Grayscale Bitcoin Trust (GBTC): All You Need to Know

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