In Brief:
- Digital Currency Group authorized the purchase of shares of Grayscale Bitcoin Trust up to a total of $1 billion worth.
- The company wants to use cash on hand in accordance with the Rule 10b-18 under the Securities Exchange Act of 1934.
On 20th October, Digital Currency Group(DCG) issued a press release stating that they have authorized the increase of purchase of shares of Grayscale Bitcoin Trust up to a giant worth of $1 billion.
In May, DCG had approved GBTC share purchases of up to $750 million. The fresh press release also states that DCG has upped its authorization from $750 million to $1 billion. Elaborating on this, they have also said that DCG aims to use cash on hand for funding the purchases. Moreover, the purchases will be made on the open market, at management’s discretion, in complete compliance with Rule 10b-18 under the Securities Exchange Act of 1934.
Interestingly, the authorization doesn’t compel DCG to make the purchase at any specific time, and so can be modified, discontinued, or extended. Additional Information regarding stock purchases will be available in the GBTC periodic reports filed with the Securities and Exchange Commission. These reports would be filed on Forms 10-K and 10-Q in accordance with the applicable rules of the Exchange Act.
DCG was founded by CEO Barry Silbert in the year 2015. “This epicenter of bitcoin and blockchain industry” is the most active investor in the blockchain sector. It backs more than 175 blockchain-related companies in over 35 countries. DCG also takes interest in investing directly in digital currencies and other digital assets.
In addition to DGC’s ranging investment portfolio, DCG is the parent company of Grayscale Investments (world’s largest digital currency asset manager), Genesis (digital asset prime brokerage), CoinDesk (a financial media, data, and information company), Foundry (a leader in bitcoin mining and staking), Luno (a leading cryptocurrency platform exchange and wallet) and TradeBlock (a leading provider of tools and data for institutional cryptocurrency traders).
Speaking of Grayscale, Grayscale Investments is the world’s largest digital currency asset manager, with more than $53.5B in assets under management as of October 19, 2021. Grayscale sponsors 14 investment products that also include the Grayscale Bitcoin Trust and the Digital Large Cap Fund. Grayscale also provides access and exposure to the digital currency asset class in the form of a security without the constraints of buying, storing, and safekeeping digital currencies directly.
Recently, Grayscale filed with the SEC to turn the largest Bitcoin Fund into a spot exchange-traded fund(ETF). If approved, this would prove to be a huge success for Grayscale. This announcement seemingly caused a slight setback to the shares of Grayscale and the fresh expansion of allocation could be seen as a result of this inference.
