Bitcoin has been on fire in recent years, with the NYSE Bitcoin Index up another 360 percent year-to-date. However, the higher bitcoin prices soar, the more bitcoin bears become convinced the cryptocurrency enthusiasm has created a textbook market bubble.
On Tuesday, one of bitcoin’s highest-profile bears reiterated his belief that the Bitcoin Investment Trust GBTC 1.22% is overvalued by more than 50 percent.
Citron Research’s Andrew Left, who first announced a short position in the GBTC on Sept. 1, provided some insight into his $500 price target for the trust, which currently trades at around $775. According to Left, the GBTC trades at a 70 to 90 percent premium to its net asset value, completely disconnected from the value of its underlying assets.
Left said the fact that the GBTC couldn’t get its Bitcoin holdings insured at a price of $2,200 per coin means there’s no way they could get them insured anywhere close to the current price of around $4,200 per coin.
“If something is so dangerous that it is uninsurable, do you want to own it?” the new Citron posting reads. “Worse, do you want to own a fund that owns it, while paying a price 70% higher than what the underlying asset is actually worth?”
To prove the point, Citron included…
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