GB Market Commentary 08/02/2023
by Marcus Sotiriou
DCG started to sell some of its Grayscale Trust holdings this week. DCG said, "This is simply part of our ongoing portfolio rebalancing," but it is clear that they are raising cash for its $575 million payment due in May this year. This payment is part of DCG’s $1.1 billion promissory note to Genesis, which was a bad loan that DCG assumed from Genesis.
DCG has sold shares in GETH which is the Grasycale Trust backed by ETHE. They sold around a quarter of its stock, raising as much as $22 million in several trades since Jan. 24. Each share has a claim to $16 of ETH, but due to the astounding discount to net asset value of over 50%, DCG sold at about $8 per share.
Many crypto investors have been concerned by news of DCG selling their assets, and what this means for Bitcoin as they hold around $375 million worth of GBTC shares. However, it was announced yesterday that Genesis creditors have now come to an agreement.
The fact that creditors have aligned means that much of the risk of this situation has been taken off the table, and the public has clarity. It means that Grayscale does not have to be sold, even though some GBTC may need to be liquidated to raise further cash, which is not a catastrophic outcome for Bitcoin’s stability, as some investors have been expecting.
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