Three Arrows Capital Ltd has bought a 6.26% stake of the $3.5 billion Grayscale Investment’s Bitcoin Trust.
According to a filing with the U.S. Securities and Exchange Commission (SEC), the Singapore-based crypto hedge fund snapped up the equivalent of 21 million shares of the Trust’s outstanding issued capital.
The shares are valued at a total of $227 million as of June 11 market prices. Each share traded at $10.80 on the over-the-counter marketplace.
In bitcoin (BTC) terms, Three Arrows’ stake represents around 20,000 BTC of the 365,000 BTC currently held by the Grayscale fund on behalf of investors. It is a fairly large acquisition by any single investor.
And once Three Arrows exceeded 5% equity holding in the Grayscale Bitcoin Trust, it became necessary under law to file a form known as Schedule 13G with the SEC. The form compels investors that purchase in excess of 5% of any class of a company’s shares to report to the securities’ regulator within 10 days of the acquisition.
“We are bullish on the Gbtc demand. Premium means inflows. There can be no premium without inflows,” Su Zhu, co-founder of Three Arrows Capital told an online crypto publication.
Grayscale, which owns around 2% of all the bitcoin in circulation, operates ten cryptocurrency investment products focused on institutional investors. With the Gbtc, institutional investors can gain exposure to BTC but without actually owning any coins.
As of June 11, Grayscale had $4 billion worth of digital assets under management, its highest ever. Funds cover ethereum (ETH), bitcoin cash (BCH), zcash, XRP, and more. The bitcoin fund is the largest of all, accounting for 88% of assets under management.
In recent months, Grayscale’s appetite for BTC has sharpened, as institutional interest in the pioneering cryptocurrency grows. The U.S. asset management firm bought more than a third of all the bitcoin mined between February and April 2020.
Grayscale also purchased 50% of all newly minted ETH, representing 1.1% of circulating ether, during the first four months of this year.
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