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Wednesday, February 1, 2023

Controlling Shareholders’ Stakes In GBTC Is Very Liquid

Genesis International and Global Currency Company, the main owners of GBTC, can’t just sell their interests to earn additional money, based on a tweet from CEO Ryan Selkis, of cryptocurrency research company Messari. According to Selkis, Rule 144A of a U.S. 1933 Securities Act sets a quarterly revenue cap either of one percent of shares outstanding or weekly trading volume as well as mandates that issuer of OTC-traded firms provide prior notice of intended sales.

This results in a limit of $23 mn in liquidations each quarter depending on the trading activity criterion as well as $62 mn in selloffs per quarter depending on the existing shares test, according to figures given by Selkis. The use of GBTC as security for a DCG-Genesis refinancing is “far more plausible,” he added.

Controlling The Shareholder’s Stakes In GBTC Is Very Liquid:

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The largest Btc investing trusts in the globe, Grayscale Btc Trust, is now dealing at a forty percent discount to net value of assets (NAV) as a result of liquidity concerns with its administrator Genesis Global and sometimes insolvency rumors with its owners, Online Currency Group. Since GBTC shares begin selling at a deficit to NAV, it is rumored that Digital Currency Company has purchased over $800 mn worth of GBTC shares. Approximately ten percent of the trust’s shares outstanding are presently owned by the company and its affiliates.

After Genesis International stopped allowing withdrawals on November 16, rumors started to spread that Major Cryptocurrency Group was also bankrupt and would have to sell GBTC in order to pay off its debts.

A letter from Coinbase’s Aaron Schnarch, and Alesia Haas CEO of Coinbase Custody, confirming that 635,235 GBTC are now being held in custody for Grayscale was also made public by Grayscale.

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