Bitcoin and ether dipped Tuesday, as crypto conglomerate Digital Currency Group reportedly has been selling shares in several crypto trusts at a deep discount, as it strives to raise money to repay creditors of its bankrupt lending arm Genesis.
The largest cryptocurrency
dipped 0.7% Tuesday to around $22,911, after recovering 38% so far this year, according to CoinDesk data. Ether
dropped 1.4% to around $1,631 but is 36% year-to-date.
DCG has been offloading shares in several crypto trusts run by its subsidiary Grayscale, with a focus on the ethereum trust, according to a Monday report by the Financial Times.
It is one of DCG’s recent efforts to raise money to help Genesis repay over $3.5 billion to its creditors. DCG is both the parent company and a debtor to Genesis.
DCG has sold about a quarter of its shares in the Grayscale ethereum trust
to raise as much as $22 million in several trades since January 24, according to the FT report citing U.S. securities filings.
“This is simply part of our ongoing portfolio rebalancing,” DCG told the Financial Times. A company spokesperson declined to comment further to MarketWatch.
DCG has also been selling smaller blocks of shares in Grayscale’s Litecoin Trust
Bitcoin Cash Trust
Ethereum Classic Trust
and Digital Large Cap Fund
the report said.
Still, bitcoin and ether prices have been relatively steady, noted John Haar, managing director at Swan bitcoin and a former Goldman Sachs veteran. It shows that DCG’s sale has been mostly priced in, according to Haar.
DCG has also reportedly hired investment bank Lazard to help sell its news site CoinDesk and sought to sell some of its $500 million venture portfolio.
Genesis said Monday that the company and DCG reached an agreement in principle with its major creditors. DCG would issue new convertible preferred stocks to exchange its $1.1 billion note due 2032 to Genesis. DCG would also refinance its existing 2023 loans to Genesis through a new loan in two tranches. The company also plans to sell the trading arm of Genesis, according to a statement.