DCG, or Digital Currency Group- a cryptocurrency conglomerate, has started selling all of its holdings in crypto funds that are being managed by the subsidiary branch- Grayscale Investments, as it has been looking toward raising capital whilst preserving the liquidity.
According to a report in the Financial Times dated February 7, a citation included the securities filings of the United States, which claimed that the company had sold around a major quarter of the shares in an Ether-based fund for a sum of $8 per share. This was the case despite every shareholding claiming to nearly double the amount in Ethereum. This sale has also reportedly brought down the price of the small share parcels in Grayscale’s Litecoin, Ethereum Classic, Bitcoin Cash, and other related trusts in addition to the Digital Large Cap Fund.
DCG Has To Offload The Holdings To Maintain Some Balance Sheet Strength
When DCG was asked about this development in share sales, it was quoted saying that they are simply a major part of the ongoing portfolio rebalancing. Despite this sentiment, some observers do believe that Barry Silbert’s company could be moving toward financial strife. One of its other subsidiaries, Genesis Global Capital- a crypto lending firm- went on to file for bankruptcy on the 19th of January. It is also believed that the company owes the creditors a sum of over $3 billion. Companies owned by the conglomerate have been considerably affected by the contagion which resulted in the implosion of FTX.
Nevertheless, DCG has gone through a number of steps in order to preserve liquidity in 2023, like issuing a letter to its shareholders that it would be halting the payments made through quarterly dividends as it looked toward strengthening the balance sheets.