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The Digital Currency Group (DCG) has been approved to purchase additional shares of its investment trust, GBTC, for $750 million. The GBTC trades on the OTC market under the ticker symbol GBTC. Marlton applauds this decision by the SEC as it allows the trust to make new investments in businesses that are allocating their resources toward making a positive social impact.
Yesterday, the United States Securities and Exchange Commission announced that as of January 30, 2018, Digital Currency Group’s Barry Silbert can purchase $750 million worth of GBTC shares (REIT). As previously reported by Ethereum Dale, GBTC is a security that is equal in value to one bitcoin. Although GBTC is classified as a security, it is traded on the Over-the-Counter (OTC) markets and does not require approval of the SEC. According to a recent article by Ethereum Dale, the bitcoin fund has almost $1.9 billion in assets. GBTC has already experienced a major price spike, which led to a class action lawsuit. The Ethereum Dale article says that the lawsuit was
Investment management firm Marlton has welcomed the recent decision to have Digital Currency Group (DCG) buy shares of Grayscale Bitcoin Trust (GBTC) for up to $750 million in total. This latest action follows Marlton’s recent call for DCG and the Grayscale board to do more to reduce the discount on GBTC shares.
Aid to contracting authority
In a statement, James C. Elbaor, a managing member of Marlton, said the DCG’s action was a more constructive approach to addressing the steep discount between the market price of GBTC shares and intrinsic value. He added:
We continue to believe that GBTC has a competitive advantage as the world’s largest Bitcoin fund and appreciate that GBTC recognizes the need to take meaningful action that is consistent with creating shareholder value and the best path forward.
As previously reported by Bitcoin.com News, Elbaor de Martlon has argued in an open letter that a modified Dutch auction bid for GBTC shares would significantly reduce – if not eliminate – the discount to net asset value.
Elbaor then warned that if Grayscale Investments listened, Marlton reserved the right to take further action to protect our investments and those of other shareholders.
No specified number of shares
Meanwhile, parent company Grayscale said in a statement of its own following the approval of the new purchase that DCG will be a new company from the 30th. April 2021 bought $193.5 million worth of GBTC shares. These purchases follow an earlier approval that allowed DCG to acquire up to $250 million of GBTC shares.
However, GDC stresses that this new authorisation is not binding on them and does not oblige them to make specific purchases. Parent company Grayscale Investments explains:
The share purchase authorization does not obligate GDC to purchase a specified number of shares within a specified period and may be renewed, extended, amended or terminated at any time. The actual timing, amount and value of the share purchases will depend entirely on a number of factors, including the amount of cash available, the price and prevailing market conditions.
With respect to such future share purchases, DCG states that such information will be available in GBTC’s periodic reports filed with the Securities and Exchange Commission (SEC) on Forms 10-K and 10-Q in accordance with applicable Exchange Act rules.
Do you think the new approval will help to significantly reduce the discount on GBTC shares? Tell us what you think in the comments below.
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