[Majromax]

GBTC is a form of "locked bitcoin," and it currently trades at a discount to the equivalent amount of ordinary bitcoin. If redemption were possible, the profitable arbitrage trade would be:

1. Use cash to buy Y GBTC at $X 2. Redeem those GBTC for Y bitcoin. 3. Sell those bitcoin for $Z > $X

Short selling isn't necessary, but it would sidestep the "use cash" part of step 1.

This trade is not currently possible because GBTC does not allow people to trade in GBTC shares for the equivalent bitcoin.

[Thorrez]

Yes, when it's at a discount, redemption is useful.

But the quote I was quoting was only talking about when it was trading at a premium. That's when I don't see how redemption could be useful.