Bitcoin, the world’s first decentralized digital currency, was created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto. It operates on a peer-to-peer network, allowing users to send and receive payments directly without the need for intermediaries like banks or financial institutions.
For many years, bitcoin was primarily used as a means of payment for goods and services on the internet. However, its popularity and value grew rapidly over time, attracting the attention of investors and traders who saw it as a potential investment opportunity.
The rise of bitcoin as an investment asset led to the creation of various ways to trade it, including cryptocurrency exchanges and futures contracts. However, it was not until 2015 that the first bitcoin-related stock was introduced to the market.
The Bitcoin Investment Trust (BIT) was launched by Grayscale Investments in 2015, becoming the first publicly traded bitcoin investment vehicle. The BIT was designed to allow investors to gain exposure to bitcoin without actually having to buy and hold the digital currency themselves.
The BIT was structured as a private placement, meaning that it was only available to accredited investors who met certain financial criteria. This allowed Grayscale to bypass the regulatory hurdles involved in launching a traditional exchange-traded fund (ETF) that would have been available to retail investors.
The BIT quickly gained popularity among investors who were looking to gain exposure to bitcoin but were hesitant to buy the digital currency directly. The trust was structured as a passive investment vehicle, meaning that it simply held bitcoin and did not actively trade or manage its holdings.
In 2017, the BIT underwent a transformation that allowed it to become publicly traded on the OTC Markets Group’s OTCQX exchange. This meant that the trust became available to a broader range of investors, including retail investors who could buy and sell shares through their brokerage accounts.
The BIT’s transition to a publicly traded stock was a significant milestone for bitcoin, as it allowed investors to gain exposure to the digital currency in a way that was more familiar and accessible than buying and holding bitcoin themselves.
Since the launch of the BIT, several other bitcoin-related investment vehicles have been introduced to the market, including ETFs and exchange-traded notes (ETNs). These products have made it easier for investors to gain exposure to bitcoin and other cryptocurrencies while bypassing some of the regulatory hurdles associated with buying and holding digital assets directly.
In conclusion, bitcoin became a stock in 2015 with the launch of the Bitcoin Investment Trust (BIT). The trust allowed investors to gain exposure to bitcoin without having to buy and hold the digital currency themselves. The BIT became publicly traded in 2017, marking a significant milestone for bitcoin and opening up new investment opportunities for a broader range of investors.