What happened

Thursday has been a strong day for cryptocurrencies. As of 3 p.m. EDT, bitcoin had risen by about 14% over the past 24-hour period, and most other major cryptocurrencies also made double-digit moves to the upside.

So, it shouldn't come as too much of a surprise that Grayscale Bitcoin Trust (OTC:GBTC) is rising as well. Shares of the trust, which essentially holds a stockpile of bitcoin that back its share price, were nearly 15% higher on the day.

Gold coin with bitcoin symbol.

Image source: Getty Images.

So what

There isn't much in the way of bitcoin- or cryptocurrency-specific news that appears to be propelling prices higher. Instead, this looks more like a relief rally, as bitcoin and most other cryptocurrencies have taken a nosedive along with the stock market as the COVID-19 coronavirus pandemic has spread across the globe. Even after today's move, bitcoin is only about 5% higher over the past week and is roughly 33% lower than it was a month ago.

Now what

Before you decide to invest in Grayscale Bitcoin Trust, it's important to point out that its shares trade at a huge premium to the value of the bitcoin owned by the trust. According to Grayscale's website, each share represents 0.00096524 bitcoins. At the current price of just over $6,100 per bitcoin, this translates to a per-share value of $5.89, about $1 less than the trust's current share price. Plus, Grayscale charges a high 2% annual management fee for maintaining the trust.