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Digital Currency Group Boosts GBTC Share Purchases to $750 Million Limit

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  • DCG has already purchased $193.5M GBTC shares by April 30.
  • Previously authorized for $250M, DCG will now purchase $750M worth of GBTC shares.
  • DCG has decided to make an open market purchase and plans to use cash on hand for that.

Digital Currency Group, Inc. (DCG), the parent organization of the world’s largest cryptocurrency investment funds manager Grayscale Investments, LLC, has authorized the purchase of Grayscale Bitcoin Trust (OTCQX: GBTC) shares worth $750 million.

Announced Monday, the investment of $750 million marks a remarkable $500 million increase from their previously decided authorization to purchase $250 million. As of yet, DCG has already reported the purchase of $193.5 million GBTC shares by April 30. 

The Open Market Purchase

For this decidedly open market purchase, the crypto market-focused venture capital company plans to use cash on hand. To be performed at management’s discretion, the acquisition will comply with “Rule 10b-18 of the Securities Exchange Act of 1934 (the Exchange Act),” mentioned the announcement. 

Moreover, the share purchase authorization doesn’t limit DCG to acquire any specific number of shares within any particular duration. The bulletin read that the firm can, at any time, decide to expand, extend, modify or discontinue the anchorage. The purchase stats, time, amount, and value are relative to several factors, including available cash levels, share price, and existing market conditions. As required by the Exchange Act, the stock purchase information will be available in the GBTC periodic reports filed with the Securities and Exchange Commission (SEC) on Forms 10-K and 10-Q.

Digital Currency Group

Founded in 2015 by CEO Barry Silbert, DCG today reigns at the epicenter of the bitcoin and blockchain industry. It backs more than 175 blockchain-related companies across over 35 nations. Apart from Grayscale, DCG is also the parent company of Genesis, a digital currency prime broker; CoinDesk, crypto specializing news site; Foundry, a bitcoin mining and staking service provider; and Luno, a leading global cryptocurrency platform.

GBTC’s Competition Driven Price Discount

Reportedly, GBTC has been trading at a considerable discount for the past few months; the fund’s competition with several other BTC funds and Canada-based BTC exchange-traded funds (ETFs) has been the main factor driving the price fall. Additionally, it was also weighed down by the prospect of ETFs being approved for the U.S. soon.

In the world of finance, repurchasing shares is a common tool. Companies use this to increase the share price by increasing demand and decreasing the available number of shares or supply.

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