Bearish Signal? DCG Starts Selling Grayscale Crypto Shares At Almost 50% Discount
February 08 2023 - 1:00PM
NEWSBTC
The issues at Digital Currency Group (DCG) seem to be coming to a
head as the company has now begun offloading its Grayscale crypto
shares. This move is one that was under speculation for a long time
in the crypto community, as well as what kind of impact such a move
could have on the market. DCG Selling Grayscale Shares For Large
Discount Following Genesis Trading’s filing for bankruptcy last
month, it was brought to light that the platform owed significant
amounts of money to creditors. One of those creditors is the Gemini
crypto exchange whose Earn customers are reportedly owed around
$900 million. This obviously triggered liquidity issues for DCG,
its parent company, which is now selling off Grayscale shares in an
effort to keep afloat. Related Reading: Here’s What Could Stop The
Altcoin Bull Rally Dead In Its Tracks On Tuesday, Financial Times
reported that DCG had filed a document with the US Securities and
Exchange Commission which showed that the company was selling a
significant portion of its holdings in Grayscale, another company
that operates under the DCG umbrella. According to the filing, DCG
has now sold about a quarter of its holdings in the Grayscale
Ethereum fund (ETHE). The company also sold off shares from various
Grayscale crypto funds. These include the Litecoin fund, and the
Ethereum Classic Fund, among others. Interestingly, the company
reportedly sold the shares for around 50% of what they are actually
worth. The ETH fund shares were sold for approximately $8 each when
their value compared to Ether is actually over $16. DCG CEO
Barry Silbert defended the sale of the shares saying that they were
“simply part of our ongoing portfolio rebalancing.” The sale is the
company’s first sale in over a year since it last sold some of its
Ether fund shares back in 2021. ETHE share price at $7.64 | Source:
Grayscale Ethereum Trust on TradingView.com Will DCG’s Dump Affect
The Crypto Market? So far, DCG’s sale of its Grayscale shares has
not had any impact on the movement of the broader crypto market.
This could be because the company seems to be avoiding selling off
any of its Grayscale Bitcoin Trust (GBTC) shares. The GBTC is the
largest Bitcoin trust in the world and with over $14 billion under
management, the trust accounts for around 3% of the total BTC
supply. As of January 2023, DCG reportedly holds around 67 million
GBTC shares, a number that could definitely have an impact on the
market if the company were to dump them. However, DCG is still
holding on to its shares, which is good news for the asset, at
least for now. Related Reading: Will Bitcoin Price Return To
$20,000? Here’s What Investors Expect Nevertheless, both the GBTC
and the ETHE are still trading at significant discounts to net
asset value (NAV). This is because investors are unable to redeem
the shares they hold for the digital assets held in the trust.
Grayscale is currently locked in a legal battle with the SEC to
turn the trust into a spot bitcoin ETF, which it believes would
help close the massive discount. As of the time of writing, the
GBTC is trading at a 42.53% discount to NAV, while the ETHE is
trading at a 51.11% discount to NAV. ETHE discount to nav remains
above 50% | Source: YCharts Follow Best Owie on Twitter for market
insights, updates, and the occasional funny tweet… Featured image
from Forbes, chart from TradingView.com
Ethereum Classic (COIN:ETCUSD)
Historical Stock Chart
From Jul 2024 to Aug 2024
Ethereum Classic (COIN:ETCUSD)
Historical Stock Chart
From Aug 2023 to Aug 2024