Digital Currency Group plans to buy additional $500 million worth of GBTC shares as trade discount continues


Digital Currency Group (DCG), the parent company of Grayscale, announced Monday that it plans to buy an additional $500 million worth of Grayscale Bitcoin Trust (GBTC) shares.

The new plan increases DCG's limit of such purchases to up to $750 million. In March, the company said it would buy up to $250 million worth of GBTC shares.

As of April 30, DCG said it had purchased $193.5 million worth of GBTC shares.

The additional buying plan comes as GBTC continues to trade at a discount for almost three months, meaning the market price of its shares is trading below its net asset value or NAV.

Buying back of shares is a common strategy for companies looking to increase the price of their shares by simultaneously creating demand while decreasing the number of shares outstanding.

The current discount of GBTC is around 10%, and there are several factors are behind the fall, including competing products in the market, as The Block reported last month.

The persistent discount recently led Marlton, an investment management firm with considerable GBTC holdings, to write an open letter to Grayscale.

Market experts recently told The Block that converting GBTC into a bitcoin ETF is one of the best options for Grayscale. Indeed, the firm announced last month that it is "100% committed" to the conversion. Still, U.S. regulators have yet to approve a bitcoin ETF in the country, and the Securities and Exchange Commission recently delayed a determination on a proposed ETF from VanEck. 

Trending Stories

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Will Sanctions Drive Russia into the Arms of Cryptocurrencies?

From the removal of many Russian banks from SWIFT to a seemingly constant flow of new sanctions, Russia’s invasion of Ukraine has left many to wonder: Is the country likely to lurch towards cryptocurrencies? And if so, what does this mean for businesses that are holding and/or using crypto? Crypto and sanctions evasion Although crypto […]
Read Full Story
Sponsored Post

Layer-2 Scaling Solutions: A Framework for Comparison - Commissioned by Polygon

Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.
Read Full Story
May 5, 2022, 3:17PM UTC