Digital Currency Group buys $ 750 million from GBTC shares

Digital Currency Group, a leading crypto investment firm led by CEO Barry Silbert, plans to acquire an additional $ 557 million of the Bitcoin fund Grayscale Bitcoin Trust run by Grayscale, one of its many subsidiaries. By DCG. This increases DCG's total investment in the fund – $ 193 million as of April 30 – to $ 750 million. However, DCG has no obligation to buy and withdraw these shares at any time. In an announcement today, he said the timing and size of his investment will depend on the amount of cash he has, the share price and market conditions. At the time of writing, there are $ 36 billion in assets managed by Grayscale Bitcoin Trust. This is a closed fund, Grayscale invites private investors to transfer bitcoin or US dollars; Grayscale publishes trust units. These shares are traded on a public stock exchange. Grayscale uses all the money it gets to buy Bitcoins and charges a 2% administration fee for issues. The actions of trust aim to keep track of Bitcoin's price. The advantage over a cryptocurrency exchange, for example, is that institutional investors can trade with an SEC-regulated instrument and stocks can be purchased from tax-protected accounts. Stocks have historically been traded at a premium to the bitcoin price. This means that investors pay the honor of buying Bitcoins through trust. However, in the last two months, the shares of the trust have been trading below the bitcoin price. While the prospect of buying cheap Bitcoins might seem like a good thing, institutional investors had hoped to make a profit from the rising premiums. This is bad for big investors like BlockFi, Three Arrows Capital, and DCG. Investors keep Bitcoin safe for six consecutive months and often take large loans to invest in the fund. If the premium continues to fall, investors may find it difficult to repay these loans.

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