The Next Way To Play The Bitcoin Boom: Gain Capital

Gain Capital Holdings Inc GCAP is the newest way for traders to play the bitcoin craze. The stock spiked more than 15 percent on Friday after management revealed the company would be launching bitcoin trading.

According to the company earnings call, Gain plans on launching bitcoin trading in Q4 after repeated requests by customers to do so.

“So, the bitcoin is really an exciting prospect for us,” Gain CEO Glenn Stevens said.

“We are adding it to our product offering and it’s going to start out as a limited rollout and build from there and it will line up just like a currency pair next to our other products where a customer will be able to use their account as they do for other products to margin traded to be long, be short, get streaming prices, everything will be the same for the customer.”

Stevens said bitcoin will be embedded in its normal trading environment, and traders will be able to do “pretty much everything they can do with our existing products.”

Traders clearly see the bitcoin offering as a money-maker for Gain, and the move could potentially open the door for other trading services to provide customers access to cryptocurrency markets as well.

As it stands, one of the most popular way for traders to play bitcoin is the OTC-listed Bitcoin Investment Trust GBTC. However, long-term investors may be paying a hefty premium for the GBTC ETF. In September, Citron Research said the Bitcoin Investment Trust was grossly overvalued.

"Do you want to own a fund that owns [Bitcoin] while paying a price 70% higher than what the underlying asset is actually worth?” Citron asked in the report.

Citron has a $500 price target for the GBTC ETF.

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