Wed Jan 22 15:41:46 2020
<8f79fcda> <@U03694HFD> how can gbtc passively manage bitcoin without running into the law of diminishing returns for subsequent investors.
My theory: the trust has a fixed amount of bitcoin in it’s coffers, meaning that every additional investor increases base demand on the trust shares, but not on bitcoin. If the demand on the shares is an expectation of future returns, but for each additional investor, there is a diminished return because there is less “future value to go around” … am I thinking right on this?
if they are passively managing (not doing shit), then that would disallow them from buying on behalf of their investor clients.
Caveat: maybe I’m missing the point and they’re a pass-through entity that purchases btc on behalf of their investors.