3) Although on the surface, buying GBTC looks more like taking advantage of someone, with a 2% annual management fee, after 50 years, all the principal will be given to Grayscale. In fact, GBTC is a fund regulated by the SEC, so traditional institutions can buy GBTC, but not BTC. Many traditional institutions have huge amounts of cash and the need to invest in BTC, so they will take over or speculate in GBTC. This creates the need for arbitrage.

4) Assume that the institution Xiao Ming wants to invest in GBTC when the BTC price is 10,000 US dollars (the starting point of the last bull market). What he does is: Xiao Ming gives Grayscale 10,000 US dollars; Grayscale buys 1 BTC and deposits it in the cold wallet, and keeps it permanently Lockup; Grayscale gave Xiao Ming 1,000 GBTC worth US$10,000 and locked it up for 6 months; 6 months later, BTC rose to 15,000, while GBTC rose to 20,000 due to demand.