- Grayscale GBTC value increases by 12% and NAV discount decreases to 44%.
- The rise comes after the January 8th deadline given to DCG by the Gemini exchange has passed successfully.
The world’s largest bitcoin and cryptocurrency fund, the Grayscale Bitcoin Trust (BTC) Fund, has seen its value skyrocket recently. The fund, which holds 635,000 BTC worth about $10.7 billion, jumped 12%, significantly outperforming other risk assets.
Bloomberg reports that the rise is the largest one-day increase the fund has recorded since February 2022. The report also points out that the fund has recently outperformed Bitcoin (BTC) itself. The surge has caused GBTC to narrow its net asset value (NAV) discount rate to 44%, down from his record of 49% achieved in December.
Bloomberg noted that the surge came after the showdown between Grayscale parent company DCG and cryptocurrency exchange Gemini passed peacefully.
On January 2nd, Gemini co-founder Cameron Winklevoss wrote an open letter to Digital Currency Group founder and CEO Barry Silbert. In the letter, he gave his DCG his January 8 ultimatum and publicly promised to work with Gemini.
See you. Please stop pretending that you and he are innocent bystanders to DCG and have nothing to do with causing this mess. It’s completely dishonest.
So why does DCG owe Genesis $1.675 billion if it doesn’t? Oh yeah, that promissory note…
— Cameron Winklevoss (@cameron) January 2, 2023
The demand is for funding users of Gemini’s Earn program in partnership with DCG’s subsidiary Genesis. Cameron claims Genesis is in financial trouble as DCG owes about $1.675 billion to the cryptocurrency lending platform. Genesis owes Gemini Earn users over his $900 million.
Silbert said in a public response that he did not owe Genesis any amount. He added that the DCG also sent a proposal to his Gemini adviser on Dec. 29, but the exchange has yet to respond.
Cameron Winklevoss similarly argued that DCG owes Genesis and must work to resolve its liquidity shortfall.
The letter, on the other hand, does not reveal the course of action Gemini will take when the deadline expires. Bloomberg’s analysis shows that Gemini’s continued silence since January 8 likely caused GBTC’s rise.
DCG, Genesis and Grayscale face challenges from other disgruntled investors.
Gemini is not alone in seeking damages from DCG and its subsidiaries. BTC Inc CEO David Bailey has launched a move to pressure Greyscale to allow investors to redeem his GBTC called RedeemGBTC.
He recently revealed that more than 2,000 of Grayscale’s more than 850,000 investors have signed up to participate in the class action lawsuit through the movement’s website. The website also states that the move’s aim is to ensure trust is managed to maximize value for all shareholders.
https://t.co/ZODJMfxy9r is currently backed by about 20% of outstanding shares and is backed by large institutional investors over the weekend.
Some serious momentum is building. https://t.co/vIY6OgD8o1
— Dylan LeClair 🟠 (@DylanLeClair_) January 9, 2023
DCG, Genesis, and Grayscale continue to reassure investors that they are working to resolve all issues and quell controversy. Last December, Grayscale said in a filing that it was considering a tender offer for up to 20% of GBTC’s outstanding shares.
The company said it would take course if its lawsuit against the SEC fails and the fund cannot be converted into an ETF.
