Grayscale Parent Company, Digital Currency Group, has proposed buying an additional $557 million of shares of the Grayscale Bitcoin Trust (GBTC), which eventually increases the total investment of the trust to $750 million.
The Digital Currency Group (DCG) is building up its investment into Grayscale Bitcoin Trust.
Digital Currency Group Investment Ramps Up to $750 Million
Digital Currency Group lead by Barry Silbert is one of the major crypto investment firms. And Grayscale is one of many DCG’s subsidiaries.
Digital Currency Group is under no compulsion to buy any share. However, it has announced that market conditions will decide the size and timing of the investment. The official statement of the press release reads;
“The share purchase authorization does not obligate DCG to acquire any specific number of shares in any period and may be expanded, extended, modified, or discontinued at any time. The actual timing, amount, and value of share purchases will depend entirely upon a number of factors, including the levels of cash available, price, and prevailing market conditions.”
Grayscale Bitcoin Trust
GBTC or Grayscale Bitcoin Trust is a closed-end trust. Private investors were invited to wire Bitcoin and US dollars, in return for which Grayscale issues a share in the trust.
Investors can trade those shares on a public stock exchange.
The management fee charged by GBTC is 2%. Having more than 3% of Bitcoin in circulation, Grayscale uses all of its received fees as an investment in Bitcoin. At present, GBTC commands $36 billion in assets under management.
Investors gain an advantage of trading through an SEC-regulated exchange which facilitates the purchase of shares from tax-sheltered accounts.
The previous month, Grayscale has confirmed its plans to convert the trust into an exchange-traded fund.
It is seen that the trust remains silent for the reasons of this huge investment.