DCG (Digital Currency Group) is a conglomerate of companies founded by Barry Silbert that includes Grayscale Investment, which manages more than US$40 billion in cryptocurrencies. Besides, they own Genesis Trading, in addition to the Coindesk news site.
The DCG group has stakes in the most important companies in the ecosystem.
Listing the companies would be a waste of time, but Adam Back’s Blockstream, the Blockchain.com wallet, and the blockchain tracking company Chainalysis stand out. Not to mention the holdings in Coinbase, Kraken, Ripio, and Silvergate.
Who is Grayscale Investment?
Rather than simply fighting for an ETF, the exchange-listed fund representing fractions of Bitcoin, Barry Silbert went there and did it. Launched in 2013, the trust is similar to a fund, but it is not regulated by the SEC, the USA’s securities watchdog.
The structure, more dependent on trust in the manager and less regulated, became the main vehicle for exposure in cryptocurrencies through a “stock” traded on the stock exchange. As a result, it exceeded 655,000 Bitcoins under management, a fortune of US$35 billion.
Who is Genesis Trading?
It was the first OTC table, the over-the-counter market for large quantities, in crypto. He is currently a broker-dealer, that is, a broker regulated by SEC and FINRA in the USA. With this, the company became one of the main intermediaries of crypto loan operations, in addition to the custody and trade of large sums.
With weekly volumes exceeding US$600 million, Genesis Trading is undoubtedly one of the main OTC tables in the world.
The purchase of US$250 million in GBTC
Now comes the cat jump, the trickery that will make Barry Silbert even richer. In the last week, the Grayscale Bitcoin Trust (GBTC), started to trade with a discount for the value of the BTCs contained therein.
In fact, there is nothing to stop the GBTC from trading above or below fair value, as, unlike the ETF, it is not possible to convert these shares into real Bitcoin. The only way to get out of Grayscale’s clutches is to resell it to another interested party.
With the launch of several Bitcoin ETFs in Canada, Grayscale’s GBTC has become less attractive, and some investors have jumped out, causing this distortion. Now, DCG announces the acquisition of up to US$250 million in the fund to contain the bleeding.
After all, is Barry Silbert a hero or a villain? The truth is that both. If it were not for your funds, we would hardly have had such a large amount of institutional demand in the past. However, the product is expensive and dangerous for its owners.