World’s biggest bitcoin fund may want to buy back shares

Last Updated: 20 December 2022

Shareholders in the Grayscale Bitcoin Trust (GBTC) may be partially bought out. The world’s largest bitcoin fund is significantly underwater. GBTC’s share price is some 48% lower than the number of bitcoin held in the fund.

The Grayscale Bitcoin Trust currently holds 643,572 BTC. They have built this fortune since 2012. In the early years, a stake in GBTC was one of the few ways for large funds in America in particular to gain exposure to bitcoin. Since then, there are numerous financial products and large companies holding bitcoin themselves.

Partly as a result, shares in the fund are underwater. Michael Sonnenshein, CEO of Grayscale, says in a letter to investors that they are considering buying back 20% of the shares.

But it is certainly not a promise. It seems to be a way to regain some confidence. Grayscale is battling the Securities and Exchange Commission (SEC) to convert their fund. Grayscale wants an exchange-traded fund (ETF), but the SEC does not think an ETF based on bitcoin is a good idea.

Remarkable fact: there are already ETFs based on bitcoin futures, though.

To possibly proceed with share buybacks, shareholders must agree. The original purchase contract must be amended, as it states that Grayscale may not buy back GBTC shares.

And again, they have to pass the SEC to get this done.

  • Gabriele Spapperi

    Gabriele Spapperi is a veteran cryptocurrency investor and blockchain technology specialist. He became fascinated with Bitcoin and distributed ledgers while studying computer science at MIT in 2011.

    Since 2013, Gabriele has actively traded major cryptocurrencies and identified early-stage projects to invest in. He contributes articles to leading fintech publications sharing his insights on blockchain technology, crypto markets, and trading strategies.

    With over a decade of experience in the crypto space, Gabriele provides reliable insights and analysis on the latest developments in digital assets and blockchain platforms. When he's not analyzing crypto markets, Gabriele enjoys travel, golf, and fine wine. He currently resides in Austin, Texas.

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