Shareholders In GBTC Having Difficulty Selling Shares
Grayscale Bitcoin Trust (GBTC) controlling shareholders Genesis Global and Digital Currency Group, according to Ryan Selkis, CEO of blockchain research firm Messari, cannot simply sell their interests to acquire more funds.
Selkis said Rule 144A of the Securities Act of 1933 compels OTC-traded entity issues to provide prior notice of prospective sales and imposes a quarterly sales cap of either 1% of outstanding shares or weekly traded volume.
GBTC, the world’s largest Bitcoin investment trust, is now trading at a 40% discount to net asset value (NAV) due to liquidity concerns with its operator Genesis Global and insolvency rumors with its owner, Digital Currency Group.
According to Selkis’ calculations, this works out to a limit of $62 million in liquidations every quarter under the outstanding shares test and $23 million under the trading volume test.
To dispel rumors that Digital Currency Group is insolvent and will need to liquidate GBTC to repay its creditors, Grayscale published a letter signed by Coinbase’s chief financial officer, Alesia Haas, and the CEO of Coinbase Custody, Aaron Schnarch, indicating that it currently holds 635,235 BTC in Grayscale’s name.
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