Thomas J. Lee, one of the most bullish bitcoin advocates on Wall Street, says the lone investment vehicle available to institutional investors is cheap because the market isn’t taking into account the digital coins spawned from splits in the biggest digital currency.
Shares of the Bitcoin Investment Trust could be worth $2,360 to $2,600 if bitcoin climbs to $25,000 by 2022, Lee, who is head of research at Fundstrat Global Advisors, wrote in a report Wednesday. The trust, which goes by the ticker GBTC, closed Tuesday at $680 in over-the-counter trading, while bitcoin recently touched a record $6,064.
The trust holds bitcoin and is only available to accredited investors.
“GBTC at $688 and with 20% NAV premium is an attractive way to gain exposure to bitcoin,” Lee said in the report, noting that the market has underestimated NAV because it has overlooked the $31 worth of bitcoin cash and $22 of bitcoin gold in each GBTC share.
“What could go wrong?” Lee wrote. “The biggest risk, in our view, is the GBTC, as an ETN, could face a liquidity problem -— if there is an all out panic. But given the highly audited custody of GBTC and its underlying bitcoin holdings, we see this as a short-term issue.”