Digital Currency Group Set to Purchase $250M Grayscale Bitcoin Trust (GBTC) Shares

By Sunil Sharma
Published March 10, 2021 Updated March 10, 2021
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Digital Currency Group Set to Purchase $250M Grayscale Bitcoin Trust (GBTC) Shares

By Sunil Sharma
Published March 10, 2021 Updated March 10, 2021

Digital Currency Group (DCG), a venture capital firm focused on the digital asset market and also the parent company behind Grayscale Investments has announced the purchase of $250 million in Grayscale Bitcoin Trust (GBTC) shares. The said purchase would be done using the cash on hand in the open market.

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The announcement comes at a time when Grayscale’s Bitcoin premiums are at their lowest which has made many believe that the move to make such a massive purchase could by its parent company be intentional and to fill the growing discount.

The official statement suggests that under the authorized purchase would not necessarily see a transfer of shares and it read,

The share purchase authorization does not obligate DCG to acquire any specific number of shares in any period, and may be expanded, extended, modified, or discontinued at any time. The actual timing, amount, and value of share purchases will depend entirely upon a number of factors, including the levels of cash available, price, and prevailing market conditions.

Crypto Community Calls DCG Purchase a Bailout

The Grayscale Investment Fund has grown in popularity with rising Bitcoin prices and has over $40 billion worth of assets under its management. The GBTC Premium has remained high throughout its life span before registering a massive dip during the ongoing price cycle. This has led many to compare the DCG purchase to the Tether-Bitfinex bailout.

The firm’s recent job page update suggests it is looking for ETF managers and planning to start a whole new ETF division as the new job page shows 9 ETF-related vacancies. These several factors combined had made many believe that the firm is actively looking to focus on launching a regulated ETF.

The fact that there is a lot of obscurity around legality and regulations around Bitcoin-based investment funds including Grayscale can also be one of the reasons behind the ETF push.

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Sunil Sharma
203 Articles
Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO's in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com

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