# It's been a good day to own GBTC.

GBTC was up about 14% on the day.

If you are not familiar, GBTC is the Grayscale bitcoin investment trust.

It is one of the few ways that you can invest in bitcoin via an IRA.

Also, if you are not familiar it has been trading at a rather large premium for some time now. Basically ever since it's inception actually.

From my research it looks like it has traded anywhere from about a 30% premium all the way up towards about a 100% premium.

Lately that premium is sitting right around the 50% mark, which is actually up a little from where it had been over the past few months.

https://s14.postimg.org/fbxglatz5/1115549-14992001943129334_origin.jpg

(Source: https://seekingalpha.com/article/4085822-safe-dividends)

# I think I finally discovered why it trades at such a high premium compared to other investment trusts...

In fact if you look at most investment trusts, they actually trade at a slight discount to their NAV (Net Asset Value).

So, what the heck gives?

Well, yesterday GBTC announced that they will be paying a $.06 dividend to shareholders of record as of December 4th 2017.

The release can be found here:

https://www.prnewswire.com/news-releases/grayscale-investments-llc-announces-remittance-of-proceeds-from-bitcoin-gold-sales-300622802.html

# The money used for this dividend is coming from the sale of Bitcoin Gold.

You see, the bitcoin held by the investment trust also received the bitcoin gold coins and the bitcoin cash coins when bitcoin forked last year.

Both off those forks turned out to offer tremendous value to bitcoin holders.

GBTC has decided that they will sell these forked coins and pay the proceeds out to shareholders in the form of dividends.

Which likely means that any time bitcoin forks going forward, there is a decent chance that GBTC will pay that value out to shareholders.

Which would help explain much of the premium that currently exists in the fund.

Now, I won't go so far as to say it explains all of it, because it doesn't, but it does give some credence to the fact that GBTC should trade at a premium to it's NAV.