Controlling shareholders' stakes in GBTC are 'highly illiquid': Report
Cointelegraph
Published Nov 28, 2022 04:00PM ET
Updated Nov 28, 2022 05:40PM ET
According to a new Twitter post by Ryan Selkis, CEO of blockchain research firm Messari, Grayscale Bitcoin Trust's (GBTC) controlling shareholders Genesis Global and Digital Currency Group cannot simply "dump" their holdings to raise more capital. Selkis explained that the restrictions are due to Rule 144A of the U.S. Securities Act of 1933, which forces issuers of over-the-counter, or OTC, traded entities to give advance notice of proposed sales, as well as a quarterly cap on sale of either 1% of outstanding shares or weekly traded volume.
Based on calculations provided by Selkis, this works to a maximum of $62 million in liquidations per quarter based on the outstanding shares test and $23 million in liquidations per quarter based on the trading volume test. "It's *much* more likely DCG-Genesis refinance using GBTC as collateral," he wrote.
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Written By: Cointelegraph
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