For years before ETFs there existed closed end funds, which were nearly identical to today's ETFs except that you couldn't redeem your ETF shares for the underlying or create new ETF shares by delivering "creation units" of the underlying. They almost always traded at a discount or premium to NAV because of this, sometimes huge discounts that persisted for years. This generally doesn't occur with ETFs solely because of the ability to create or redeem shares for the underlying. The reason GBTC is selling at a premium is because it is currently much more like those old closed end funds than an actual ETF. From their prospectus (http://grayscale.co/wp-content/uplo...formation-and-Disclosure-Statement-3-6-15.pdf) : "Redemption of Shares The Shares may be redeemed only by or through an Authorized Participant and only in Baskets. See “Creation and Redemption of Shares” for details on the redemption of Shares. On September 23, 2014, the Distributor received a letter from the staff of the SEC’s Office of Compliance Inspections and Examinations summarizing the staff’s findings from an onsite review of the Distributor’s broker-dealer activities conducted in June 2014. Among other things, the staff stated that it had concluded that the Trust’s redemption program appears to violate Regulation M under the Securities Exchange Act because redemptions of Shares take place at the same time the Trust is in the process of creating Shares. The Distributor and the Trust are in discussions with the staff of the SEC in order to resolve the staff’s concerns, although the Distributor and the Trust cannot at this time predict the impact such a resolution may have on their respective activities. See “Risk Factors – The Trust has suspended its redemption program, which could have a material adverse effect on an investment in the Shares.” If you carefully read through their documentation you'll see this isn't the only problem they have, it appears that you may also have to wait a year between creating to be able to sell the created shares, for example. As a result, there's no reason to believe the share price and NAV will ever converge except by random chance and the NAV is essentially meaningless. You should also know the compliance bar is exceedingly low for OTCBB stocks, and the fact that they failed to meet even that low bar should give you pause for thought.