Crypto investment firm Digital Currency Group (DCG) has revealed its plans to invest up to $250 million in Grayscale’s Bitcoin Trust.
DCG is the parent company of Grayscale, the world’s largest crypto asset manager.
According to a press release, the firm intends to use its own cash to buy the share. Although each GBTC share is equivalent to a certain amount of Bitcoin, the share can trade above or below the value of the underlying asset.
DCG appears to be jumping on the trend of companies throwing cash at the digital asset, even though it is not directly holding the Bitcoin. MicroStrategy kick started the trend with a $250 million Bitcoin purchase in August last year. Since then, several other prominent companies have joined the train. In the case of DCG, the firm has a track record of investing in crypto-based projects. However, this would be the first time it will be making any direct investments in digital assets.
It is worth pointing out that since the investment is planned, DCG may not proceed with the purchase or might not buy up to $250 million. The firm mentioned several factors that could affect its exposure, including the available cash, prevailing market conditions, and the price of the asset.
The announcement might give GBTC the needed boost. The product is currently trading at a discount, with the current premium sitting at -5.43%.