What happened

Grayscale Bitcoin Trust (NASDAQOTH:GBTC), an investment vehicle designed to allow investors to indirectly own bitcoin, is moving higher on Wednesday. As of 3:20 p.m. EDT, shares of the fund were up by about 11%.

So what

As you can probably guess, Grayscale Bitcoin Trust is moving higher because the price of bitcoin is rising. Bitcoin has gone up by 38% in the past week and is now trading for more than $8,100 -- the highest price we've seen in months and more than double the lows reached earlier this year.

Three stacks of gold coins with bitcoin symbols.

Image source: Getty Images.

The main reason for the continued rally seems to be increased demand from institutional investors. There's a rumor that Fidelity is preparing to offer cryptocurrency trading to institutional clients, and Grayscale Bitcoin Trust itself recently reported record inflows during the first quarter, with about three-fourths of the new money coming from institutional investors.

Now what

There are a few things to keep in mind. First, even after its recent rally, bitcoin is trading for less than half of its 2017 peak value of nearly $20,000, so we're still a long way from breaking out to new highs.

And, also keep in mind that while Grayscale Bitcoin Trust's price moves with the price of bitcoin, it's not always a perfect relationship. Specifically, the trust often trades at a massive premium to the value of the bitcoin it owns -- as I write this, the premium sits at about 30%, but has been much higher in the past.