Recent developments around the Digital Currency Group (DCG) led to widespread speculation about its future of its star subsidiaries. These include Genesis Global Trading and more importantly Grayscale Investments Inc. The latter happens to be the firm behind the Grayscale Trust, the world’s largest institutional Bitcoin fund.
Grayscale’s DCG connection
DCG’s crypto empire spans across several entities including prime brokerage Genesis Global and the investment firm Grayscale. Earlier this month, news of Genesis’ poor financials broke out, drawing rumors about its insolvency. This was followed by a shareholder letter sent out by DCG founder Barry Silbert, which revealed a $1 billion hole in Genesis’ balance sheet covered by DCG to prevent its insolvency.
Interestingly, the letter also revealed DCG’s own liabilities, which stood to be more than $2 billion. Genesis’ further failed at attempts to raise $1 billion paired with DCG’s questionable finances. This led crypto Twitter to make grave speculations. These include the liquidation of the Grayscale Bitcoin Trust by parent firm DCG, which would essentially flood the crypto market with over 630,000 BTC held in the fund.
Messari CEO explains why GBTC’s liquidation could be unlikely
Ryan Selkis, the founder of popular on-chain analytics firm Messari, took to Twitter to explain why the FUD related to DCG liquidating the GBTC is an unlikely event.
1/ No, DCG and Genesis can’t “dump” GBTC. That’s part of their liquidity crisis, but also net good news for GBTC shareholders and FUD fighting.
In public markets there are rules!