Digital Currency Group is buying up to $50 million of Ethereum Classic Grayscale shares that came amid the question about the visibility of the DCG flagship BTC trust investment product as we are reading more in our latest Ethereum classic news today.
DCG will buy more shares in a grayscale trust that holds Ethereum Classic and as per the announcement, Digital Currency Group announced it will buy $50 million worth of ETCG which is a stock owned by Grayscale that is actually a proxy owning Ethereum Classic:
“DCG plans to use cash on hand to fund the purchases and will make the purchases on the open market, at management’s discretion.”
Grayscale is best known for its Grayscale Bitcoin trust which owns a huge amount of BTC that is packed into shares that trade on the public market. The BTC trust and other Grayscale products provide a new way for investors that are ineligible to buy crypto directly, to get more exposure to various cryptocurrencies. Grayscale launched the Ethereum Classic product in 2017 and this option came about after a group of ETH miners refused to participate in a 2016 fork led by the founder Vitalik Buterin that has a market cap of $5 billion which is a fraction of the current market cap of $225 billion.
The DCG announcement didn’t appear to have given Ethereum Classic a market boost with the currency dropping 10% on Monday which is one day after seeing a decline on the markets. Ethereum Classic enjoyed many price surges in the bull market earlier this year and crossed the $100 mark as the traders attempted to give it a pump. It traded to $43 on Monday. The decision of DCG to purchase shares of the Ethereum Classic trust came after the company disclosed that it will spend up to $750 million buying shares of the Grayscale Bitcoin Trust.
The purchase was seen as a move by the DCG to boost the price of the trust which crashed badly amidst the rumors that the SEC could approve a BTC ETF which is a development that will provide an inexpensive and easy way for the public to purchase BTC in the form of shares. Under Grayscale’s business model, the company sells access to its crypto trust products to accredited investors and takes up a 2% management fee in the process. The investors will sell the shares to the general public once the lock-up period elapsed.
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