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.
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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