Microstrategy”s parent company has announced plans to buy $250 million worth BTC from its trust. Digital Currency Group (DCG), the parent company of Microstrategy has announced its plans to buy up to $250 million of GBTC shares. The announcement comes amidst speculation that Microstrategy is readying an ETF filing.
Digital Currency Group has further revealed that it plans to use cash on hand to fund the purchases and will make the purchases on the open market. The Grayscale Bitcoin Trust (GBTC) is currently the biggest trust with BTC worth more than $35 billion under management. The 649,130 BTC under its management represents a little over 3% of all circulating BTC.
The purchase will see the parent company take advantage of the current trading discount. The current discount stands at 5.73%. The set record discount is 11.79% given on March 04. The cut is designed to attract new investors especially at a time when Bitcoin is struggling to break above. The GBTC has been an ideal investment vehicle for retailers and institutions to get exposure to Bitcoin without having to hold Bitcoin itself.
It is rumoured that Microstrategy could now be looking into a more effective instrument. Microstrategy is hiring ETF strategies. The job posting is for 9 nine ETF specialists. This is despite not having any ETF products. As such, many are speculating that the firm is ready to file for an ETF. Microstrategy has never filed for one. The SEC has over the years rejected numerous filings giving reasons such as market volatility and risk of price manipulation.
In recent times, Bitcoin has gained great attention from institutions and top influential individuals. Additionally, its neighbour Canada earlier this year approved the very first Bitcoin ETF in the country and has since been a major success. Some top analysts believe these reasons are enough to nudge the SEC the right way and see the first SEC-approved Bitcoin ETF. And Microstrategy could be the first firm to get it.
Bitcoin has received the recent developments positively. After initially slumping below $55K, the digital asset is back above. At the time of press, the leading digital asset has climbed as high as $56K. Before the end of the week, the asset will look to retest it’s current ATH of $58K. Bulls hope to break the resistance and set higher resistance above $60K before the next retracement.