- Grayscale’s GBTC climbs 12% in value, reducing its NAV discount to 44%.
- The climb comes after the Jan. 8 deadline given to DCG by Gemini exchange passed uneventfully.
The world’s largest Bitcoin and cryptocurrency fund, the Grayscale Bitcoin Trust (BTC) fund, has seen a sharp rise in its value recently. The fund which holds over 635k BTC worth around $10.7 billion jumped 12%, outperforming other risk assets by a large margin.
Bloomberg reports that the climb is the biggest one-day increase the fund has recorded since February 2022. The report also notes that the fund has done better than Bitcoin (BTC) itself as of late. With the spike, GBTC has narrowed the discount to its net asset value (NAV) to 44 percent from a record of 49 percent reached in December.
The surge comes after the date for a showdown between Grayscale’s parent company, DCG, and crypto exchange Gemini passed calmy, Bloomberg notes.
Back on Jan. 2, co-founder of Gemini, Cameron Winklevoss, wrote an open letter to Digital Currency Group’s founder and CEO Barry Silbert. In the letter, he gave DCG an ultimatum of Jan. 8 to publicly commit to working together with Gemini.
There you go again. Stop trying to pretend that you and DCG are innocent bystanders and had nothing to do with creating this mess. It’s completely disingenuous.
So how does DCG owe Genesis $1.675 billion if it didn’t borrow the money? Oh right, that promissory note…
— Cameron Winklevoss (@cameron) January 2, 2023
The demand relates to funds of users of Gemini’s Earn program that are tied up in DCG’s subsidiary Genesis. Cameron alleges that Genesis is in financial trouble because DCG owes the crypto lending platform around $1.675 billion. Genesis in turn owes Gemini Earn users over $900 million.
Silbert stated in a public response that did not borrow the amount from Genesis. He added that DCG also sent a proposal to Gemini’s advisors on Dec. 29 which the exchange is yet to respond to.
Cameron Winklevoss likewise responded to maintain that DCG owes Genesis and has to commit to solving the liquidity shortage.
Meanwhile, the letter did not reveal the line of action that Gemini will take at the expiration of the deadline. Gemini’s continued silence since Jan. 8 is what has likely sparked the GBTC rally, Bloomberg’s analysis observes.
DCG, Genesis, and Grayscale still facing challenges from other disgruntled investors.
Gemini is not the only party seeking reparations from DCG and its subsidiaries. David Bailey, the CEO of BTC Inc, has started a movement to get investors to pressure Grayscale to enable the redemption of GBTC called RedeemGBTC.
He recently revealed that more than 2,000 of Grayscale’s over 850k investors have registered to join the class action via the movement’s website. The website also notes that the goal of the movement is to ensure that the trust is managed to maximize the value for all shareholders.
https://t.co/ZODJMfxy9r now has the backing of approximately 20% of outstanding shares, with large institutional support coming in over the weekend.
Some serious momentum being built. https://t.co/vIY6OgD8o1
— Dylan LeClair 🟠 (@DylanLeClair_) January 9, 2023
DCG, Genesis, and Grayscale have continued to reassure investors that they are working to resolve all issues and quell controversies. Back in December, Grayscale said in a filing that it is considering a tender offer for up to 20% of the outstanding shares of GBTC.
The company stated that it would take the course if its lawsuit against the SEC fails and it is unable to convert the fund to an ETF.
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