Digital Currency Group Authorizes $250M Buyback For Its Grayscale Trusts

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Digital Currency Group authorizes $250M buyback for its Grayscale Trusts
Digital Currency Group authorizes $250M buyback for its Grayscale Trusts

The global cryptocurrency market cap now stands at $1.88T, down by 3.30% over the last day, according to CoinMarketCap data.

Bitcoin (BTC) has been trading between $42,358 and $44,500 over the past 24 hours. As of 04:09 pm (UTC) today, BTC is trading at $42,640, down by 3.67% on the day.

Most major cryptocurrencies by market cap are trading lower on the day. Market outperformers include TORN, BICO, and ANC, up by 40%, 21%, and 14%, respectively.

Digital Currency Group Authorizes $250M

The Digital Currency Group (DCG) board has authorized a share repurchase program of up to $250 million across its nine publicly-traded cryptocurrency trusts.

The plan includes up to $30 million worth of shares in the Grayscale Litecoin Trust (LTCN), $10 million of the Grayscale Horizen Trust (HZEN), $10 million of the Grayscale Zcash Trust (ZCSH), and up to $200 million in any of its other six publicly-traded products, including the Grayscale Bitcoin Trust (GBTC).

DCG will use cash on hand to fund the repurchases and will do so in the open market under management’s discretion.

The Grayscale Bitcoin Trust has been trading at a steep discount to net asset value for months, and in October DCG upped its buyback plan for that product to $1 billion from $750 million. As of Thursday, there was $301.3 million of remaining authorization in that program, and as of Wednesday, the trust was selling for a 24.9% discount to net asset value (NAV).

DCG will fund the repurchases using cash on hand and will do so on the open market at management’s discretion.

The Litecoin, Horizon, and Zcash trust trade at significant discounts to NAV as well.

Conclusion

“When a closed-end fund’s NAV is trading at a double-digit discount, the manager will often repurchase shares to try to minimize the discount for investors,” says the author. Accelerate

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