Digital Currency Group sells $700M of shares for investors to take profits

November 1, 2021 Coin Telegraph

Digital Currency Group sells 0M of shares for investors to take profits

Digital Currency Group CEO and founder Barry Silbert didn’t sell any stock in the latest round.

Digital Currency Group (DCG), one of the largest companies in the cryptocurrency industry, has completed a major secondary investment round led by Japanese financial giant SoftBank.

DCG has sold $700 million worth of shares to companies like Google’s parent company, Alphabet, to bring its valuation to more than $10 billion, the company officially announced Monday.

“Proud to welcome SoftBank, CapitalG, Ribbit, GIC, Tribe and Emory to an already fantastic list of DCG shareholders. And even more proud of over 1,000 employees of DCG and our wholly-owned subsidiaries that made this happen,” DCG CEO and founder Barry Silbert said.

In a Wall Street Journal interview, Silbert emphasized that the investment wasn’t about raising capital for DCG but rather an “opportunity for some for some early investors to exit and take profits.” All the raised money went to the selling shareholders, and none of them sold their entire stake, the company said. Silbert, who owns about 40% in the firm, said that he didn’t sell any stock in the latest round.

Silbert noted that the company hasn't ruled out a potential initial public offering, but it’s “not in the plans and not being discussed right now.” LDCG has been profitable and is on track to top $1 billion in revenue for the year, the CEO said.

DCG is a major crypto industry company, known for operating Grayscale Investments, the world’s biggest digital asset manager with $50 billion under management. In mid-October, Silbert hinted that the company is making plans to convert its Bitcoin Trust into a spot-settled Bitcoin exchange-traded fund.

Biggest Bitcoin fund in the world could become ETF by July as GBTC nears $40B AUM

October 29, 2021 Coin Telegraph

Bitcoin

Filing to convert GBTC now is “perfect timing,” the company’s ETF head argues, but concerns remain over the overall strength of the industry.

Grayscale could launch its Bitcoin (BTC) exchange-traded fund (ETF) as soon as July 2022, one of its executives has said.

Speaking at a virtual event organized by MarketWatch on Oct. 27, Grayscale global head of ETFs David LaValle gave a nine-month timeline for approval by United States regulators.

Grayscale: Now’s the time to file for an ETF

Grayscale, which runs the largest-volume Bitcoin investment product globally, the Grayscale Bitcoin Trust (GBTC), reiterated this month that it is “committed” to transforming it into an ETF.

According to LaValle, the timing for submitting the application to do so this week was ideal.

“We thought it was the perfect time to submit our filing,” he said.

“Now that the Bitcoin futures products were somewhat off the plate of the SEC, they would be open to look at the filings of spot-based products.”

ETF applications require a lengthy 240-day analysis period with the U.S. Securities and Exchange Commission, opening up the potential for a go-ahead by July.

October saw four ETFs get the green light, these all based on Bitcoin futures rather than spot, something which Grayscale and others are keen to change.

GBTC had $38.8 billion in assets under management (AUM) as of Thursday, with the total across all Grayscale funds now at $53.1 billion.

*GBTC holdings vs. BTC/USD chart. Source: Bybt*

Hayes: ETF market needs “fresh capital”

As Cointelegraph reported, hopes are high that spot ETFs will be allowed to operate from November amid fresh criticism of futures-based products.

JUST SAW ANALYSIS by a fund manager trader of the 1st futures roll date for the #bitcoin ETFs (they roll to new front-month contract). As many predicted, it's not pretty--ETF investors face big tracking error. Add to that two flash crashes in #BTC price since ETF inception. Ugh
— Caitlin Long (@CaitlinLong_) October 29, 2021

Arthur Hayes, former head of derivatives trading giant BitMEX, delivered a more scathing take on the entire ecosystem this week.

“There already exists a pseudo-ETF with over $40 billion in AUM, the Grayscale Bitcoin Trust (GBTC). It is not technically an ETF, but it hoovered up assets nonetheless. Therefore, what is required is not a movement of AUM from one tracker product to another, but fresh capital into the system,” he wrote in a dedicated blog post.

“When GBTC is added to the mix of US-listed tracker products, will there actually be net new demand from retail traders and institutions who aren’t already invested in the space? I fear that the narrative on institutional and retail investors plowing AUM into the complex might be misplaced, as those who want to be involved largely already are.”

Markets have had years to price in a potential ETF launch, this having seen multiple rejections by the SEC, each moving the Bitcoin price less and less with time.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin bulls set to net an $830M profit after Friday’s BTC options expiry

October 21, 2021 Coin Telegraph

<div>Bitcoin bulls set to net an 0M profit after Friday's BTC options expiry</div>

Bitcoin Price

Bitcoin's surge to $67,000 has given bulls an advantage in Friday's $1.8 billion BTC options expiry.

Two or three weeks ago, when Bitcoin (BTC) was trading below $52,000, a trader betting on $65,000 by Oct. 22 would have been considered extremely optimistic. The fact that 98% of the put (sell) options for Bitcoin's weekly options expiry this Friday have been placed below that price proves that this is true.

Fast forward to this week, and the successful launch of the first BTC exchange-traded fund (ETF) in the United States and news that Digital Currency Group (DCG), the parent company of the Grayscale Bitcoin Trust, increased its limit to acquire up to $1 billion worth of GBTC shares, boosted Bitcoin price to new all-time highs.

The $40.5 billion investment vehicle has been available for trading on U.S. markets since March 2015, and it recently filed a request to the United States Securities and Exchange Commission (SEC) to convert its GBTC product to an ETF.

*Bitcoin price on Coinbase in USD. Source: TradingView*

The parabolic move to the $67,000 all-time high on Oct. 20 has also been fueled by billionaire investor Carl Icahn's bullish remarks. With four decades of splendid returns, Icahn warned of an impending financial crisis and highlighted Bitcoin's strength as an inflationary hedge.

Furthermore, Vasiliy Shpak, Russia's deputy minister of Industry and Trade, reportedly filed a proposal to use the country's oil exploration gas production to power cryptocurrency mining. The Russian government has attempted to reduce gas flaring to cut emissions but has struggled to meet targets due to underdeveloped infrastructure.

Even though this Friday's $1.8 billion options expiry is a landslide victory for bulls, it wasn't like that a couple of weeks ago.

*Bitcoin options aggregate open interest for Oct. 15. Source: Bybt*

At first sight, the $1 billion call (buy) options dominate Oct. 22 expiry by a mere 23% compared to the $810 million puts (sell) instruments.

However, the 1.23 call-to-put ratio is deceptive because the recent rally will likely wipe out most of the bearish bets if Bitcoin's price remains above $64,000 at 8:00 am UTC on Friday. There is no value on a right to sell Bitcoin at $60,000 if it's trading above that price.

Bulls seem pretty comfortable above $65,000

Below are the four most likely scenarios for the Oct. 15 expiry. The imbalance favoring either side represents the theoretical profit. In other words, depending on the expiry price, the quantity of call (buy) and put (sell) contracts becoming active varies:

Between $60,000 and $62,000: 8,670 calls vs. 3,070 puts. The net result is $335 million favoring the call (bull) instruments.
Between $62,000 and $64,000: 10,780 calls vs. 2,100 puts. The net result is $540 million favoring the call (bull) instruments.
Between $64,000 and $66,000: 13,050 calls vs. 280 puts. The net result is $830 million favoring the call (bull) instruments.
Above $68,000: 13,680 calls vs. 20 puts. The net result is complete dominance, with bulls profiting $940 million.

This crude estimate considers call options being used in bullish bets and put options exclusively in neutral-to-bearish trades. However, this oversimplification disregards more complex investment strategies.

For example, a trader could have sold a put option, effectively gaining a positive exposure to Bitcoin above a specific price. But, unfortunately, there's no easy way to estimate this effect.

Bears need a 7% price correction to reduce their loss

In each of the scenarios drawn above, bulls have absolute control of this Friday's expiry. This week's positive newsflow leaves little reason for investors to take profit or accept a price correction ahead of the expiry. On the other hand, bears need a 7% move below $62,000 to avoid an $830 million loss.

Traders must consider that during bull runs, the amount of effort a seller needs to pressure the price is immense and usually ineffective. Currently, options markets data point to a considerable advantage from call (buy) options, fueling even more bullish bets for the monthly expiry on Oct. 29.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Grayscale Confirms Plan to Convert GBTC Into Bitcoin ETF

October 18, 2021 Bitcoin.com

Grayscale Confirms It Will Apply for Bitcoin ETF

October 18, 2021 The Crypto Briefing

Grayscale confirms Bitcoin ETF plans and adds exposure to Zcash, Stellar Lumens and Horizen to its trusts

October 18, 2021 Coin Telegraph

Business

Grayscale said it would proceed "once there’s official and verifiable evidence of the SEC’s comfort with the underlying Bitcoin market."

Institutional asset manager Grayscale has announced it will be converting its GBTC Trust into an exchange-traded fund (ETF) once the United States Securities and Exchange Commission (SEC) has “comfort” with recently-approved Bitcoin futures ETFs.

In a Monday Twitter thread, Grayscale communications director Jennifer Rosenthal said the asset manager would proceed with offering an ETF when “the SEC has formally expressed their requisite comfort with the underlying Bitcoin market.” The offering would convert the asset manager’s Grayscale Bitcoin Trust (GBTC), first listed in 2013, into an ETF.

“Once there’s official and verifiable evidence of the SEC’s comfort with the underlying Bitcoin market — likely in the form of a Bitcoin Futures ETF being deemed effective — the NYSE Arca will file a document called the 19b-4 to convert $GBTC into an ETF,” said Rosenthal.

The announcement follows ProShares announcement that its Bitcoin (BTC) futures-linked ETF will begin trading on the New York Stock Exchange under the ticker BITO starting Oct. 19. Filings with the SEC show the regulator has also accepted the registration request for shares of Valkyrie’s Bitcoin Strategy ETF to be listed on the Nasdaq and may accept others in the near future — the SEC currently has several crypto ETF applications under review.

Grayscale also added three cryptocurrencies available for trading through its suite of crypto investment trust products. The firm said its Grayscale Zcash Trust, Grayscale Stellar Lumens Trust and Grayscale Horizen Trust were now listed on the OTCQX Best Market under the ticker symbols ZCSH, GXLM and HZEN, respectively.

According to Grayscale, the three trusts are not subject to registration and disclosure requirements from the SEC. The vehicles provide a way for investors to gain exposure to the tokens without directly investing in them. Grayscale offers six other crypto investment products with exposure to Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Ethereum Classic (ETC) and Litecoin (LTC), in addition to a basket of cryptocurrencies through its Digital Large Cap Fund.

Grayscale hints at plans to convert Bitcoin trust into BTC-settled ETF

October 18, 2021 Coin Telegraph

Bitcoin

Grayscale looks to be seeking to restructure its Bitcoin Trust into a physically-backed fund after the SEC approved a Bitcoin futures ETF.

Institutional investment giant Grayscale is reportedly considering converting its Bitcoin Trust into a physically settled exchange-traded fund (ETF).

On Oct. 17, Barry Silbert, the CEO of Grayscale’s parent company Digital Currency Group, hinted that Grayscale is making plans to convert its Bitcoin Trust into a spot-settled Bitcoin fund.

After having taken to Twitter to criticize the cash-settled Bitcoin futures ETF recently approved by the U.S. Securities and Exchange Commission (SEC), Bitcoin commentator Preston Pysh chimed in to ask Silbert when Grayscale’s Bitcoin Trust would be converted into a BTC-settled ETF. “Stay tuned,” Silbert responded.

stay tuned
— Barry Silbert (@BarrySilbert) October 17, 2021

However, Grayscale Bitcoin Trust investors appear to have been unsettled by Silbert’s remarks, with Twitter user “svrgnindividual” questioning what a restructure would mean for investors holding shares in Grayscale’s Bitcoin Trust.

“What happens to us Grayscale investors once the spot ETF is approved? Is our investment converted into ETF shares?” they tweeted.

Rumors of Grayscale’s purported ambitions for a Bitcoin ETF began circulating late week after a CNBC report citing anonymous insiders claimed that Grayscale was waiting for the Securities and Exchange Commission to finally approve a Bitcoin ETF.

On Oct. 15, the SEC announced it had accepted the registration of securities from ProShares Trust’s futures-based Bitcoin (BTC) exchange-traded fund. ProShares’ ETF offers investors exposure to contracts that speculate on the future price of BTC that are settled in cash.

Despite the ETF’s approval being cited as the primary catalyst for Bitcoin’s recent bullish market action, many analysts have criticized the fund for its cash-settled structure, instead advocating for the SEC to approve a Bitcoin ETF that is backed by and settled in BTC.

According to Grayscale’s latest holdings update on Oct. 15, the firm boasts $52.6 billion in assets under management (AUM) — 73% of which is held in the Bitcoin Trust. The data suggests that Grayscale’s Bitcoin stash comprises roughly 620,000 BTC or 3.3% of Bitcoin’s total supply.

Cardano’s Potential To Attract Outside Investors Hinges on One Factor, According to Crypto Giant Grayscale

October 5, 2021 The Daily Hodl

Institutional bulls back Bitcoin after weeks of altcoin accumulation

October 5, 2021 Coin Telegraph

AUM

Institutional crypto appetites have shifted away from altcoin back to Bitcoin, with BTC investment products leading the inflows for digital asset products for the second week in a row.

Institutional investors are pivoting back to digital gold with Bitcoin (BTC) investment products posting a third consecutive week of inflows.

According to CoinShares’ latest Digital Asset Fund Flows Weekly report, BTC investment products generated $68.7 million worth of inflows between Sept. 27 and Oct. 1, representing a 36% increase in exposure week-over-week.

While products tracking BTC have now dominated inflows to digital asset products for two weeks in a row, the bullish turn comes fresh off a record streak of outflows that persisted for eight consecutive weeks until early September.

Total inflows for digital investment products were $90 million for the week, marking the seventh consecutive week of inflows as institutional investors continue to increase exposure to digital assets.

Institutional investors also snapped up a significant amount of Ethereum (ETH) investment products, with inflows totaling $20.2 million. BTC and ETH products gained roughly 7.4% and 3.2% for the week respectively.

There was also a mixed appetite for altcoins last week. Products tracking Cardano (ADA), and Solana (SOL) posting inflows of $1.1 million and $700,000 respectively, while Polkadot (DOT) and Binance Coin (BNB) fund shed $800,000 each. Multi-asset funds also saw minimal inflows of $1.9 million.

Institutional demand for Solana appears to have bottomed out, with inflows to products tracking SOL crashing by 98% since posting highs of $38.9 million five weeks.

Despite the markets recovering from July’s violent pull-back, CoinShares highlighted that last week’s trade volume of $2.4 billion remains low compared to the $8.4 billion worth of institutional crypto products traded weekly during the height of 2021’s bull cycle in mid-May.

According to CoinShares’ estimates, institutional asset managers currently represent combined assets under management (AUM) worth $57.1 billion combined — a weekly increase of 8.5%.

Grayscale continues to dominate the sector, representing $41.1 billion or 71% of the sector’s total AUM. CoinShares XBT and Purpose funds rank in second and third with $2.2 billion and $2.1 billion worth of AUM respectively.

Grayscale Adds Solana and Uniswap to Crypto Investment Fund

October 4, 2021 Bitcoin.com

Grayscale

Grayscale: Now’s the time to file for an ETF

Hayes: ETF market needs “fresh capital”

Bulls seem pretty comfortable above $65,000

Bears need a 7% price correction to reduce their loss

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