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Crypto fund manager Grayscale Investments is accumulating Bitcoin at a rate equivalent to 150% of the new coins created by miners since the May 11 block reward halving. According to data published by independent crypto researcher Kevin Rooke, Grayscale has added 18,910 BTC to its Bitcoin Investment Trust since the halving, while only 12,337 Bitcoins have been mined since May 11.

The U.S. Securities and Exchange Commission (SEC) will again delay a decision on the conversion of Grayscale Bitcoin Trust into an exchange-traded fund, this time until early July. The SEC asked Grayscale to clarify how it will head off share manipulation, fraud and other possible issues. The SEC had already delayed a decision on the matter in December.

Accredited investors that Grayscale allowed to buy GBTC at the NAV may be selling en masse. Grayscale imposes a six-month lock-up on all new investments in GBTC. Once that period is over, accredited investors are free to sell their subscriptions on OTC Markets. In a rising market, they pocket both the appreciation of the underlying bitcoin and the premium that non-accredited investors are willing to pay to access GBTC.

Grayscale Investments has posted at least nine exchange-traded dund (ETF) related positions to LinkedIn. Though Grayscale has filed to create an ETF in the past, the firm doesn't currently have an active filing with the SEC for a Bitcoin or crypto-related ETF. But the firm could roll its $35 billion Bitcoin Trust, the largest Bitcoin fund, into an ETF. The job postings currently listed on LinkedIn include an ETF market maker relationship manager, ETF finance reporting manager, ETF finance support manager, ETF creation and redemption specialist, ETF authorized participant relationship manager, ETF product development specialist, a compliance officer and two sales director positions.

After a month of headlines about its flagship product, the Grayscale Bitcoin Trust (GBTC), trading with a negative premium, the world's largest crypto exchange-traded product (ETP) provider is fighting back. In a post earlier this week, the global market leader with a little more than 75% of all $61 billion in ETP crypto assets under management announced that it will convert the GBTC in an exchange-traded fund "when permissible," meaning when the SEC is ready to approve its first bitcoin ETF. 

Grayscale bought 40,000 Bitcoin (BTC) between January 13 and 29, around $1.36 billion worth in 16 days according to Glassnode. That compares to 26,000 BTC that have been mined into existence since the start of the year.

Hedge funds on CME are short on Bitcoin futures for more than $1 billion. They have been increasing their short positions since October when the BTC price started climbing. As data provider Skew has previously shared, these leveraged funds, while short on CME Bitcoin futures, are likely to be long on Grayscale Bitcoin Trust (GBTC) trying to collect the Grayscale premium and the CME futures basis. Interestingly, for the first time ever, the GBTC premium, the difference between the market price of bitcoin and the implied price by GBTC, has gone negative today. This premium has been dropping ever since December 22nd, 2020, when it was above 40%.

According to Osprey Funds CEO Greg King, the fund isn't set up to compete with the likes of Grayscale. Instead, King wants the Osprey Bitcoin Fund to make investing in Bitcoin easier for people who-while they may have had limited exposure to the market previously-have never fully embraced cryptocurrencies.

With crypto firms being pressed to show more information about their reserves after FTX filed for bankruptcy protection, Grayscale won't be showing any proof of reserves. "Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure."

Among one of the most significant firms entangled in the FTX collapse is the Digital Currency Group, whose subsidiaries include Genesis, Grayscale, CoinDesk, Foundry, and other companies. Genesis, in particular, is under the spotlight because, as an institutional lender, they may have extended capital to entities embroiled with the FTX/Alameda collapse. Genesis has at least $175M stuck on FTX, and also had large exposure including unsecured loans to Three Arrows Capital (3AC) before it collapsed in June. On November 16th, Genesis halted withdrawals and new loan originations following FTX's fall... Genesis connects institutional investors to digital asset markets allowing them to trade, borrow, hedge and more. Genesis is heavily used throughout the industry, including by centralized exchanges like Gemini for their "earn" program which allows customers to earn yield off of their holdings. Last week, Gemini Earn halted withdrawals after Genesis halted withdrawals... Also, Genesis's lending arm, which is widely integrated into various services that offer yield on crypto, may have been affected by offering loans that FTX or Alameda will not repay. DCG has been allegedly looking to raise capital, up to $1B, with little interest from investors balking at a previously undisclosed $1.1B loan from DCG to Genesis, with Grayscale being the only assets receiving any meaningful interest.

OXT Research has taken steps to confirm Grayscale's self-reported Bitcoin (BTC) holdings that back its GBTC closed-end fund, based on public data and blockchain forensics. It confirmed that the approximate balance of 633,000 BTC held was held at Coinbase Custody, to conclude that Grayscale's self-reporting is credible. OXT Research speculates that Grayscale might not want to disclose their addresses is that they want to avoid providing information about who their most used counterparties are, which could be its parent (DCG) and Genesis Trading, which is teetering on the edge of bankruptcy.

Digital Currency Group (DCG) owned Genesis Global Holdco LLC filed for Chapter 11 bankruptcy protection. Genesis owes over $3.5 billion to its top 50 creditors, including crypto exchange Gemini. The bankruptcy could have broader implications because DCG also owns digital assets manager Grayscale, which operates the Grayscale Bitcoin Trust (GBTC), which has $10 billion-plus in assets under management. There would be serious crypto market  repercussions if the Genesis bankruptcy somehow leads to the liquidation of 600,000+ bitcoin holdings.

Grayscale has submitted an updated filing for its spot Bitcoin exchange-traded fund (ETF) days after engaging in talks with the U.S. Securities and Exchange Commission (SEC). Adjustments include shifting from monthly to daily fees.

"A federal appeals court formalized a victory for Grayscale Investments LLC in its bid to create an exchange-traded fund based on Bitcoin over the objection of the US Securities and Exchange Commission. The move sends the matter back to the SEC. The mandate puts into effect the court's ruling in August, when it overturned the SEC's rejection of Grayscale's proposal to convert its trust into an ETF. Judge Neomi Rao called the SEC's decision "arbitrary and capricious" because the regulator failed to explain why it approved similar products. The SEC had argued that an ETF based on Bitcoin lacked adequate oversight to detect fraud. "

"The Commission previously approved ETPs that hold only futures contracts that trade on the CME, which is registered with the CFTC; those ETPs' underlying assets are thus subject to robust surveillance," it said. "The bitcoin spot market, by contrast, is fragmented and unregulated, and petitioner presented no supportable basis to conclude that the CME's surveillance of futures trading would sufficiently detect and deter fraud and manipulation targeting the bitcoin spot market and thereby protect against fraud and manipulation in Grayscale's product." https://grayscale.com/wp-content/uploads/2022/12/Reply-Brief-of-Respondent-SEC-12092022.pdf

Crypto collapse: DCG's problem is Grayscale, FTX Bahamas agreement, DeFi trading arrest, Silvergate Bank, Huobi, Binance

Grayscale experienced a 42% uptick in product inflows from $30.1M in 4Q18 to $42.7M in 1Q19, with hedge funds ramping up their investments, from less than $1M in 4Q18 to approximately $24M in 1Q19.

Grayscale Investments Releases Q2 2019 Digital Asset Investment Report Digital currency asset manager Grayscale's assets under management nearly tripled from $926 million to $2.7 billion in Q2 2019 on inflows of $85 million, the rest being asset price appreciation. Institutional investors comprised the 84% of Q2 inflows (75% over 12 months).

Grayscale Investments has published a case study on how BTC could be used as a hedge against financial instability. The firm used the case of trade tensions between the United States and China to make their point.

Grayscale operates an Ethereum Trust focused on institutional investors. In 2020, it has been building up its Ethereum holdings at a faster rate. It has purchased an amount of Ethereum equivalent to half of the new supply of coins in 2020.