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- Grayscale’s parent firm has plans to purchase $250 million worth shares of Grayscale Bitcoin Trust
- The Digital Currency Group has revealed that it will be funding the purchase of shares with cash on hand
- It seems like the firm has planned to purchase the shares to increase the price of those shares
Grayscale Bitcoin Trust shares worth $250 million are expected to be purchased by its parent firm. On Wednesday, Digital Currency Group Inc (DCG), the parent firm of GBTC, revealed the purchase plan of its subsidiary flagship product in an announcement. According to the investment firm’s announcement, DCG will be purchasing the shares on the open market. However, the firm’s plan came after the shares faced some correction from the price level of $58.22 to $41.40.
How many shares of Grayscale Bitcoin Trust will DCG purchase?
Following the DCG announcement, it was observed that the firm would fund the purchase of Grayscale Bitcoin Trust shares using the cash on hand. Also, the firm will be making the purchase on the open market in compliance with Rule 10b-18 under the Securities Exchange Act (SEA) of 1934. Indeed, the investment firm has no obligations of purchasing any specific number of shares. Moreover, those shares might be expanded, extended, modified, or discontinued at any period of time.
Numerous factors determine the actual amount, time, and value of shares being purchased depending upon. Some of the purchase factors also include the levels of cash available, the price levels, and prevailing market conditions. However, more information regarding the purchase is expected to be available in the Grayscale Bitcoin Trust periodic reports documented with the US SEC on Forms 10-K and 10-Q as required by the applicable rules of the SEA.
Why is DCG willing to purchase those shares?
Repurchasing share is a common tool used by firms trying to increase Grayscale Bitcoin Trust shares’ price. Using the method, firms create demand while decreasing outstanding shares. Following the scenario, as the shares that were long traded at a premium to the price of Bitcoin held in the trust began to trade at a discount. DCG group also seems to have planned to use the repurchasing tool. Moreover, in recent trade, the shares surged by 4.34%. According to the latest update from Grayscale, the trust of the crypto is having $42.1 billion in net assets under management.
