Bearish Signal? DCG Starts Selling Grayscale Crypto Shares At Almost 50% Discount

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Issues at Digital Currency Group (DCG) seem to be coming to a head as the company has now started offloading its Grayscale crypto shares. This move is one that was subject to speculation in the crypto community for a long time, as well as what kind of impact such a move could have on the market.

DCG is selling Grayscale shares at a deep discount

Following Genesis Trading’s filing for bankruptcy last month, it was brought to light that the platform owed a significant amount to creditors. One of those creditors is the Gemini crypto exchange, which owes about $900 million to its Earners customers. This apparently triggered liquidity issues for DCG, its parent company, which is now selling off Grayscale shares in an attempt to stay afloat.

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On Tuesday, the Financial Times informed of DCG filed a document with the US Securities and Exchange Commission that showed the company was selling a significant portion of its stake in Grayscale, which operates under the DCG umbrella.

According to the filing, DCG has now sold nearly a quarter of its stake in the Grayscale Ethereum Fund (ETHE). The company also sold shares of various Grayscale crypto funds. These include the Litecoin Fund and the Ethereum Classic Fund.

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Interestingly, the company reportedly sold the shares for about 50% of what they were actually worth. ETH Fund shares were sold for around $8 each when they were actually worth more than $16 in comparison to Ether.

DCG CEO Barry Silbert defended the share sales, saying they were “part of our ongoing portfolio rebalancing.” The sale is the company’s first in over a year as it last sold some of its Ether Fund shares in 2021.

Grayscale Ethereum Trust price chart from

ETHE share price at $7.64 | Source: Grayscale Ethereum Trust on

Will the DCG dump affect the crypto market?

So far, the sale of its Grayscale shares by DCG has had no impact on the movement of the broader crypto market. This could be because the company appears to be avoiding selling any of its Grayscale Bitcoin Trust (GBTC) shares.

GBTC is the largest bitcoin trust in the world and with over $14 billion under management, the trust holds approximately 3% of the total BTC supply. As of January 2023, DCG held approximately 67 million GBTC shares, a number that could certainly impact the market if the company were to dump them. However, DCG is still holding on to its shares, which is good news for the asset, at least for now.

Nevertheless, both GBTC and ETHE are still trading at a significant discount to Net Asset Value (NAV). This is because investors are unable to redeem their shares for digital assets held in trust. Grayscale is currently embroiled in a legal battle with the SEC to convert the trust into a spot bitcoin ETF, which it believes will help stave off heavy discounting.

As of the time of writing, GBTC is trading at a 42.53% discount to NAV, while ETHE is trading at a 51.11% discount to NAV.

Grayscale Ethereum Crypto Fund NAV Discounted

ETHE discount to nav remains above 50% | Source: YCharts
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