Crypto venture capital giant Digital Currency Group (DCG) has announced its plan to invest up to $250 million in Grayscale Bitcoin Trust (GBTC).
The planned investment means DCG could end up getting indirect exposure to bitcoin worth $250 million. DCG intends to purchase GBTC shares on the open market.
DCG is the owner of Grayscale, the manager of GBTC, the world's largest bitcoin investment product that holds more than $35 billion worth of assets.
Since DCG's investment is planned, it does not mean the group will buy GBTC shares. DCG said several factors would play a role in getting GBTC exposure, including the levels of cash available, price, and prevailing market conditions.
The news comes as GBTC is trading at a discount, meaning the market price of its shares in the over-the-counter secondary market is lower than the net asset value (NAV) of its shares. The current premium of GBTC stands at -5.43%.
The fall in the premium suggests that some large investors might be cashing out their gains or just arbitraging premiums away. Competing products, i.e., new bitcoin exchange-traded funds (ETFs) in Canada, could also be a contributing factor, as The Block reported previously.