DCG Dumps ETH Trust Shares Despite Steep Discount: Report

The crypto conglomerate has reportedly sold a quarter of its shares in Grayscale’s Ethereum Trust after Genesis’ bankruptcy

article-image

T. Schneider/Shutterstock.com modified by Blockworks

share

Digital Currency Group (DCG) has reportedly been selling shares of some of Grayscale Investments’ crypto trusts in an effort to raise capital following the bankruptcy filing of Genesis. 

Founded by Barry Silbert, DCG is the parent company of crypto lending firm Genesis, asset manager Grayscale Investments and media company CoinDesk, among others.

A quarter of DCG’s stock in the Grayscale Ethereum Trust (ETHE) has been sold, raising as much as $22 million in several trades since Jan. 24, the Financial Times reported late Monday, citing filings. 

ETHE, which launched in 2017, has $5 billion in assets. The trust was trading at a roughly 54% discount to its net asset value on Monday, according to YCharts.com.

Dave Nadig, a financial futurist at data firm VettaFi, said the trust issuer’s reported sale at such a steep discount highlights the need for a redemption window. Redemptions of shares for ETHE are not currently authorized. 

“It’s not a great look, obviously, but on the other hand, if a corporation needs to raise cash, selling assets is a pretty time-honored way of doing so,” he told Blockworks.  

DCG has also moved to sell a smaller number of shares in Grayscale’s Litecoin Trust, Bitcoin Cash Trust, Ethereum Classic Trust and Digital Large Cap Fund. 

Those four trusts have combined assets under management of roughly $700 million.  

Spokespeople for DCG and Grayscale did not immediately return a request for comment. 

Genesis filed for bankruptcy last month after taking a major hit during last year’s market turmoil. The company on Monday reached an agreement in principle with Gemini and other creditors on a restructuring plan, following a public feud with Gemini’s Cameron Winklevoss. 

DCG’s reported sale of various Grayscale trust shares comes after the Financial Times said last month DCG was looking to sell some of its venture capital holdings, citing people familiar with the matter.

Grayscale’s largest investment product is its Bitcoin Trust (GBTC), which launched in 2013 and has $14.5 billion in assets. 

The cryptoasset manager has sued the SEC in an attempt to convert GBTC to an ETF, a process Grayscale executives said would help close the trust’s discount, which has exceeded 40% in recent months. 

Grayscale CEO Michael Sonnenshein told investors in a December letter the firm would consider a tender offer for GBTC shareholders if its bid to convert the trust to an ETF fails.

There is no concrete timeframe for a resolution to the legal wrangling, and some GBTC shareholders are growing impatient.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

RTK networks are critical to enabling a world of ubiquitous autonomous drones, vehicles, and industrial robots. We believe the GEOD token enables both a cost and product advantage for the GEODNET RTK network, which will allow it to out-compete multi-billion dollar incumbents Trimble and Hexagon.

article-image

Senator Cynthia Lummis hopes a US strategic bitcoin reserve can be teed up for “adoption in 2025”

article-image

As EIP-4844 “blobs” transform the economics of Ethereum layer-2s, a growing debate pits long-term scalability against immediate ETH value

article-image

Prosecutors argued that FTX co-founder Gary Wang cooperated in their case against former FTX CEO Sam Bankman-Fried

article-image

The two largest crypto exchanges respectively run the second- and sixth-largest Solana validators

article-image

MicroStrategy’s bitcoin buying has exploded — it now holds 1.7% of the asset’s circulating supply

article-image

The MiCA era will reward the prepared and punish the rest