Grayscale Unveils Mining Hardware Exposure Via Private Product

Offering designed to capture upside of crypto winter, largest digital currency asset manager says


Blockworks exclusive Art by Axel Rangel


key takeaways

  • Grayscale anticipates mining equipment to become available at “distressed levels” in coming months
  • Firm is set to use hardware to mine and sell bitcoin daily

A new private co-investment product from Grayscale Investments is designed to allow investors to gain exposure to mining hardware as it seeks to capitalize on buying opportunities in the distressed segment. 

Capital raised by The Grayscale Digital Infrastructure Opportunities LLC (GDIO) will mainly be used to purchase mining hardware, according to Rayhaneh Sharif-Askary, Grayscale’s head of investor relations. GDIO will employ its hardware by seeking to mine and sell bitcoin daily and will look to distribute a portion of its operating income to investors quarterly, she added.

The investment vehicle is available to eligible individual and institutional accredited investors.

After three years of operation — but no later than five years — GDIO will seek an exit strategy, which may include a disposition of its assets.

The product is designed to capture upside, the company said, amid the so-called crypto winter — a period that Grayscale researchers said in a July report could last another eight or so months.

Bitcoin mining has become less profitable in recent months, as bitcoin’s price has fallen about 70% from its all-time high reached last November. Some mining companies have resorted to selling bitcoin to help cover operational and other expenses. 

“In the coming months, we anticipate mining equipment will become available for purchase at distressed levels,” Sharif-Askary told Blockworks.

“GDIO will have an opportunity to provide liquidity to the mining ecosystem, purchasing mining equipment at an optimal time in the mining cycle to profitably mine bitcoin in the future,” she said.

Grayscale, a subsidiary of Digital Currency Group (DCG), manages $17.6 billion in assets. Crypto mining and staking firm Foundry, a fellow DCG affiliate, is set to manage operations of GDIO.

Foundry provides financing for bitcoin mining equipment and access to equipment manufacturers.

“As part of Foundry’s mission to empower a decentralized infrastructure, we’re excited to partner with Grayscale to broaden the ability to invest in bitcoin mining during this opportune time,” Foundry CEO Michael Colyer said in a statement.

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