What's happening?

Shares of Bitcoin Investment Trust (OTC:GBTC) were up about 17% as of 3:15 p.m. EST as investors piled back into the market's favorite proxy for betting on the price of bitcoin. The trust is topping bitcoin's performance today, as the leading cryptocurrency was up only about 5.6% from where it stood at the market close on Monday.

So what

Call today's performance evidence of a renewed fervor for ways to bet on  bitcoin. Most of today's gains are related to the Bitcoin Investment Trust's expanding premium, rather than an increase in the price of bitcoin. At its current levels, I estimate that the trust trades at a price roughly 57% higher than the value of the bitcoin it holds, up from a 34% premium reported at the close on Monday.

bitcoin token

Image source: Getty Images.

Bitcoin Investment Trust holds about 0.001 bitcoin for each share outstanding, thus at a price of $7,540 per bitcoin, each share represents ownership of bitcoin worth about $7.59. In effect, buying shares of Bitcoin Investment Trust at current market prices is the equivalent of paying roughly $11,650 per bitcoin.

Now what

Double-digit percentage daily moves for Bitcoin Investment Trust and bitcoin are nothing new. Because neither are particularly liquid compared to traditional financial assets, small changes in speculative sentiment often result in large price swings from day to day. But if today's rally holds, it will break a five-day losing streak for Bitcoin Investment Trust. 

Bitcoin and Bitcoin Investment Trust are still well off their recent highs. In December, when bitcoin struck an all-time high of nearly $20,000 each, Bitcoin Investment Trust closed at a price that implied a bitcoin valuation of more than $37,000. The trust and its premium valuation have since come back down to Earth, as Bitcoin Investment Trust is down about 69% from its all-time closing high.