Digital Currency Group (DCG) the parent company of Grayscale Investments, has authorized the purchase by DCG of up to $250 million worth of shares of Grayscale Bitcoin Trust (OTCQX: GBTC).
The purchase by DCG will be made on the open market, at management’s discretion, and will use cash on hand.
DCG was founded by CEO Barry Silbert in 2015 and has emerged as a very successful cryptocurrency-focused firm. Grayscale Investments is the world’s largest digital currency asset manager, with more than $42.1 billion in assets under management as of March 9, 2021.
If the price of Bitcoin continues to rise the investment may be a good move for the firm. As of today, shares in GBTC trade around $52/share with a market capitalization of almost $9 billion. The Trust provides a simple on-ramp for retail investors to gain exposure to Bitcoin via a traditional brokerage account.
A recent Bloomberg report said the discount in GBTC may signal a march higher in the price of Bitcoin. To quote the report:
“Grayscale Bitcoin Trust Discount May Signal March to $100,000. Bitcoin’s end of February price disparities on U.S. regulated exchanges portend a firming price foundation, if history is a guide, and are evidence of just how nascent the crypto is. Indicating capitulation selling, the Grayscale Bitcoin Trust closed at it steepest discount ever, while December CME-traded Bitcoin futures settled about 20% higher.”