What a difference a week makes.
Bitcoin has bounced back dramatically from the invasion day lows of $35k, and now sits comfortably above $43k, with a $50k+ target clearly in sight.
War was looming. Inflation was sky high. And the prospect of serious rate hikes saw many investors running for cover.
Markets capitulated amidst the uncertainty.
But now, with some clarity restored, the markets are responding.
And the smartest of the smart money is buying:
The name’s Silbert…
Barry Silbert.
And he knows a good deal when he sees one.
TL;DR:
- Digital Currency Group Grayscale buy-back.
- Discounts to Net Asset Value (NAV).
- Follow the smart money.
Barry’s buying back Grayscale shares, because it’s a screaming-good bargain!
If you’re looking for confirmation that now could be a good time to buy, look no further.
The Digital Currency Group (DCG), led by CEO Barry Silbert, is the ultimate OG in the space, having backed over 200 blockchain projects across 35 countries.
DCG is also the parent company of Grayscale Investments, the world’s largest digital currency asset manager, which offers a wide range of crypto trusts.
For a deep-dive article, check out our article on Grayscale.
And guess what?
The DCG has just announced a $250 million share repurchase program for a number of its Grayscale trusts, including Litecoin (LTCN), Zcash (ZCSH) and Bitcoin (GBTC).
We know what you’re thinking: $250 million is dust for these guys.
And it is. But that’s not the point.
It’s the principle that matters.
The DCG are playing the gigabrain move, almost as if they know something!
Ran has said it many times: buying Grayscale’s Bitcoin Trust (GBTC) shares at a discount is one of the best trades available for anyone with a long-term time horizon.
Today, GBTC is currently trading at a 25% discount to NAV.
If you believe the market will go up, then now could be an amazing time to buy bitcoin for approximately… $32,700!
Why GBTC is a win/win play
Purchasing GBTC shares offers exposure to bitcoin, and not the underlying asset itself: It’s a derivative (without leverage), and it’s backed by the real thing: bitcoin. Investors receive shares in a security.
So, what’s the catch?
Well, there isn’t one. Not unless you count the annual management fee of 2%. A minuscule price to pay for a 25% discount!
Best of all, there are two possible scenarios for how the trust continues:
- Grayscale is majorly pushing for the Bitcoin Trust to become a spot ETF. If approved by the Securities and Exchange Commission (SEC), shares would instantly jump up to match the Net Asset Value (NAV). The discount would vanish overnight, and shareholders would see the value of their holdings spike (provided they bought at a discount).
- Grayscale’s ETF bid gets refused by regulators, and first mover advantage goes to someone else. This means no love for GBTC: The trust would eventually be dissolved, the assets liquidated, and shareholders redeemed. If the shares were bought at a discount, holders would literally receive free BTC!
You want to know what a no-brainer looks like? Because as far as we’re concerned, this is it!
Barry’s feeling bullish
Barry hasn’t just been buying shares in Grayscale trusts. It appears he’s also been buying spot BTC.
When Barry buys, we listen. The guy’s a genius.
You don’t amass US$40 billion under management by making dodgy investment decisions!
He’s a pretty good barometer of which way the market is going, but the smart investors know that when the ‘Silbert indicator’ flashes a buy signal, it’s usually worth paying attention to!
Banter’s take
The DCG’s $250-million shares buy-back is a drop in the ocean, but a hugely positive sign.
And in the midst of such a difficult period for global markets, investors tend to look to the best for guidance.
These guys are the best of the best.
This is what guidance looks like.
It represents a huge vote of confidence from one of the most respected and credible players in the space.
So, the question is: are you buying BTC? Or GBTC? Or both?!
