Digital Currency Group Inc. (DCG), a crypto investment firm based in New York, has purchased $338 million in Grayscale Bitcoin Trust (OTCQX: GBTC) shares. The purchase also comes alongside a new authorization issued for the firm to buy up to $1 billion worth of GBTC.
According to an announcement issued by the firm, it plans to use its available cash on hand to fund this series of purchases, with all transactions done on the open market at the management’s discretion. The purchases are planned to be done in compliance with Rule 10B-18 under the Securities Exchange Act of 1934. The move follows a recent fall in Grayscale Bitcoin Trust’s price, with a -20.5% drop discounting share prices in the fund, leaving the underlying Bitcoin represented per share to get lower values than expected.
Founded in 2015 by its CEO, Barry Silbert, DCG is the parent company of Grayscale Investments, LLC.; Genesis, a global digital asset prime brokerage, Bitcoin mining and staking firm Foundry, crypto platform Luno, and blockchain data analytics firm TradeBlock.
Previously, DCG has purchased some $193.5 million worth of GBTC shares in May 2021, during which its purchase limit was set at $250 million. Grayscale, its subsidiary, has also revealed plans of a Bitcoin ETF (exchange-traded fund), alongside developments to add exposure for its investors to Zcash (ZEC), Stellar Lumens (XM), and Horizen (ZEN), among others on its development roadmap.
The likelihood of Grayscale’s Bitcoin ETF to be approved by the Securities and Exchange Commission is high, given how a ProShares Bitcoin Strategy ETF has already opened for trading just this week. SEC chair Gary Gensler has encouraged other institutional investment firms to apply for BTC-related ETFs backed by Bitcoin futures, which are not based on the spot market price of the alpha cryptocurrency.
Bitcoin has recently surpassed its most recent all-time high (ATH) of $64,804.72, which it achieved sometime in mid-April this year. At the time of writing, the alpha cryptocurrency is trading by over +3% of its previous ATH at $64,872.47. The surge in price has been attributed to the demand and buying frenzy as a result of Bitcoin ETFs being approved by the SEC, albeit on variably limited points. At press time, only the ProShares Bitcoin Strategy ETF has been approved, but more are to follow and are already pending the Commission’s regulatory review process.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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