Gold bug and bitcoin opponent, Peter Schiff has alleged that the Digital Currency Group (DCG)â€™s plan to acquire GBTC shares worth $250 million could be an indication that Grayscale Investment will be reducing the value of its AUM. In addition, Schiff claims in his tweet that â€œGrayscale will be selling bitcoin to help raise the cash needed to fund the buyback.â€
In its statement that announced the plan to buy GBTC shares, the DCG revealed it will â€œuse cash on hand to fund the purchases.â€ Additionally, Grayscaleâ€™s parent firm said â€œwill make the purchases on the open market, at managementâ€™s discretion, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934.â€ However, in his tweet, Schiff, who has also become Grayscale Investmentâ€™s nemesis, contends that the planned purchase is the â€œresult of a persistent large discount to NAV.â€
Meanwhile, in the inevitable Twitter debate that followed Schiffâ€™s remarks, one user Jeremy asks the gold bug if it, therefore, made sense for Grayscale â€œto buy back all of its shares to sell the physical?â€ Yet, in his response, Schiff claims that Grayscale only â€œneeds to sell enough BTC to fund the number of shares it wants to buy back.â€ If however, the price of BTC falls, then the crypto asset management company â€œwill need to sell more.â€
As expected, Schiffâ€™s latest remarks about Grayscale Investmentsâ€™ have also sparked a quick and furious response from bitcoiners on Twitter. For instance, in his response to Schiffâ€™s comments, crypto analyst Willy Woo simply posts a chart that juxtaposes the performance of gold next to that of GBTC.
Meanwhile, Peter McCormack, an â€œultra bitcoin holderâ€ also commented on Schiffâ€™s relentless opposition to BTC saying: â€œImagine being so upset all the time regarding some code.â€
Another user, Juan Gutierrez, responded to Schiffâ€™s latest rant by re-posting Ray Dalioâ€™s tweet in which the Bridgewater Associates founder attacks â€œpeople who argue against something whenever they can find somethingâ€”anythingâ€” wrong with it.â€
After dropping to record levels, the discount on the GBTC has since narrowed to just under 5% at the of writing. It remains to be seen if the premium on GBTC shares can peak to levels seen in December 2020.
What are your thoughts on Schiffâ€™s latest rants about Grayscale? You can share your views in the comments section below.
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