DCG Plans To Buy Upto $50 Mln In Shares Of Ethereum Classic Trust.

DCG Plans To Buy Upto $50 Mln In Shares Of Ethereum Classic Trust.

2021-06-22 | Big Bob

DCG Plans To Buy Upto $50 Mln In Shares Of Ethereum Classic Trust.

DCG [Digital Currency Group], the parent company of cryptocurrency asset manager Grayscale Investments, revealed its plans to buy up to $50 Mln in shares of the latter’s Ethereum Classic Trust. In line with an official announcement earlier on Monday, DCG – will fund the purchases with cash available and make them on the open market. The price of Ethereum Classic [ETC] tripled earlier in May, reaching an all-time high of $177.26 USD prior to falling approximately 70% into the low $50s, where it remains today. Though ETC has returned 668% year-to-date – far above ETH’s 163% gain - many crypto analysts saw the ETC rally as a speculative fever like the dogecoin [DOGE] frenzy instead of an informed investment supported the blockchain’s technological potential. Gil Luria, an equity analyst at D.A. Davidson & Co. who has followed the cryptocurrency markets for years, interpreted DCG’s move as an arbitrage play.
“Because of the volatility in crypto assets, DCG has opportunities to maximize disconnects between the worth of its exchange-traded listings and therefore the price of the underlying assets,” Luria outlined. “Since they own the underlying assets they will sell those to accumulate shares within the exchange-traded listings and capture the spread.”
The company made an identical move to prop up shares of Grayscale’s flagship Bitcoin investment trust earlier in March. These trusts are designed to offer investors exposure to crypto assets without the effort of fixing a wallet or safeguarding cryptographic private keys. ETC was created in 2016 after a schism among Ethereum’s developers over the way to handle a hack that resulted in a hard fork.

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