Grayscale’s New Venture Aims to Capture Bear Market Opportunities in Bitcoin Mining

Digital asset mining and staking infrastructure firm Foundry,will manage the day-to-day operations of Grayscale’s new co-investment vehicle

AccessTimeIconOct 6, 2022 at 12:33 p.m. UTC
Updated May 9, 2023 at 3:58 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Crypto asset management firm Grayscale is forming an investment vehicle that will help investors take advantage of the low prices of bitcoin mining infrastructures amid a continued crypto winter.

The private co-investment vehicle, Grayscale Digital Infrastructure Opportunities (GDIO), will partner with digital asset mining and staking infrastructure firm Foundry for its day-to-day operations, according to a statement. Grayscale and Foundry are both subsidiaries of Digital Currency Group (DCG), which is the parent company of CoinDesk.

  • Big Tech Comes to Small Town: A Bitcoin Mining Story in Spur
    15:03
    Big Tech Comes to Small Town: A Bitcoin Mining Story in Spur
  • What's the Biggest Misconception People Have About Bitcoin Mining?
    00:39
    What's the Biggest Misconception People Have About Bitcoin Mining?
  • What You Need to Know About the Bitcoin Halving
    01:47
    What You Need to Know About the Bitcoin Halving
  • Bitcoin Extends Rally as $1B in BTC Withdrawals Suggests Bullish Mood
    01:10
    Bitcoin Extends Rally as $1B in BTC Withdrawals Suggests Bullish Mood
  • The crypto winter has clearly been rough for the miners, who have seen profit margins shrink as bitcoin prices plunged more than 50% this year while power prices soared and capital dried up. This has directly hurt prices for infrastructures required for bitcoin mining, including the highly specialized computers, which were in high demand during last year’s bull run, driving up prices to all-time-highs, according to an index maintained by Luxor Technologies. Prices for the mining machines have since crashed near their 2020 lows this year and in some instances, even the largest manufacturers, such as Bitmain, are offering large discounts to sell their mining rigs.

    “Grayscale’s unique position at the center of the crypto ecosystem enables us to create offerings that allow investors to put capital to work through differing market cycles,” said Grayscale CEO Michael Sonnenshein in the statement. “Our team has long been committed to lowering the barrier for investing in the crypto ecosystem – from direct digital asset exposure, to diversified thematic products, and now infrastructure through GDIO,” he added.

    As the bear market is the perfect opportunity to build, some industry participants have taken the plunge to deploy capital into the struggling mining sector. “As part of Foundry’s mission to empower a decentralized infrastructure, we’re excited to partner with Grayscale to broaden the ability to invest in Bitcoin mining during this opportune time," said Foundry CEO Michael Colyer.

    Last month, Crypto billionaire Jihan Wu – the founder of Bitmain – was reported to be setting up a $250 million fund to purchase distressed assets from mining firms. Meanwhile, decentralized finance (DeFi) firm Maple Finance said that it is starting a lending pool with $300 million capacity for mid-size bitcoin miners across North America and Australia.


    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Aoyon Ashraf

    Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.