Digital Currency Group to Buy Up to $250M of Grayscale Bitcoin Trust Shares

The blockchain investment firm said it will buy the GBTC shares on the open market.

Mar 10, 2021 at 2:18 p.m. UTC
Updated Sep 14, 2021 at 12:24 p.m. UTC

Digital Currency Group, the parent of Grayscale, said it’s authorized the purchase of up to $250 million worth of the lagging shares of the Grayscale Bitcoin Trust (OTCQX: GBTC), its subsidiary's flagship product. 

  • In an announcement Wednesday, DCG – which is also the parent company of CoinDesk – said it will be buying GBTC shares on the open market.
  • The purchase comes as the price of GBTC shares has fallen from an all-time high of $58.22 set last month to $41.40 last week before rebounding somewhat. In addition, the shares, which had long traded at a premium to to the price of bitcoin held in the trust, recently started trading at a discount.
  • Repurchasing is a common tool among companies who are trying to increase the price of those shares by simultaneously creating demand while decreasing the number of shares outstanding.
  • In recent trading, GBTC shares were up 4.34% to $51.25.
  • DCG said plans to use cash on hand to fund any purchases, which it said will be made in compliance with Rule 10b-18 of the Securities Exchange Act of 1934.
  • “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,” said the company.
  • The Grayscale Bitcoin Trust launched in 2013 is the world’s largest bitcoin fund, offering investors the opportunity to gain exposure to the leading cryptocurrency.
  • According to its latest figures, Grayscale currently has $42.1 billion in net assets under management across all its cryptocurrency trusts and funds.

UPDATE (March 10, 18:00 UTC): Adds background on share repurchases.
CORRECTED (March 19, 15:55 UTC): Corrects name of Digital Currency Group.

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