According to the latest reports, the Digital Currency Group (DCG), behind several struggling crypto companies, has started selling its coins. Leading asset management firm Digital Currency Group (DCG) has reportedly sold a portion of its stake in Grayscale Bitcoin and altcoin trust funds, raising approximately $22 million, according to the Financial Times (FT). This sale attracted attention as it could trigger a decline in the market. So, which altcoins DCG sells? Here are the details…
DCG takes action
DCG has been caught in a series of financial crises following the bankruptcy of its trading arm, Genesis. The firm reportedly owes its creditors more than $3 billion, including nearly $900 million to Gemini Earn users. Digital Currency Group (DCG) has begun selling its holdings in various investment vehicles run by its subsidiary and crypto asset manager Grayscale at a massive discount, according to a report from the Financial Times citing US securities filings.
As we reported on cryptokoin.com, Grayscale operates the Grayscale Bitcoin Trust (GBTC), which has more than $10 billion in assets under management and traded at a record discount in net worth late last year. On January 20 this year, Genesis Global Holdco LLC, the holding company of cryptocurrency lender Genesis Global Capital, filed for Chapter 11 bankruptcy protection in New York after being hit by the 2022 crypto epidemic exacerbated by several bankruptcies. The companies that led to this boom in 2022 were mostly Three Arrows Capital and crypto exchange FTX.
Which altcoins are in danger?
On Monday, it was reported that DCG and its subsidiary Genesis have reached a settlement with a key group of creditors seeking to sell their crypto trading business and lending arm, which was restructured through bankruptcy. To raise more funds to support its bankrupt subsidiary, DCG has reportedly begun selling some assets in its portfolio for $500 million, including news outlet CoinDesk.
DCG has also filed filings with the U.S. Securities and Exchange Commission (SEC) announcing their agreement to sell a portion of its stake in Grayscale, the FT reported on Feb. According to the report, DCG began selling its stake in Grayscale on January 24 with a focus on the Ethereum Fund. DCG sold Grayscale Ethereum shares at $8 per share, raising approximately $22 million. The share price is down more than 50 percent from its initial price of $16 per ETH.
DCG also sold some small stakes in Litecoin Trust, Bitcoin Cash Trust, Ethereum Classic Trust and Digital Large Cap Fund. Apart from this, as we have reported before, coins such as Horizen (ZEN), Zcash (ZEC), Decentraland (MANA) are also included in the funds. “This is part of our portfolio rebalancing process,” DCG said, according to the FT. An earlier Bernstein report had said that saving Grayscale would come at a cost to DCG.
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