Crypto asset manager Grayscale Investments on Monday announced that it resumed private placement of Grayscale Bitcoin Trust (GBTC) shares.
The private placement of the shares will be offered periodically only to accredited investors for a daily subscription.
Grayscale currently manages nine single digital asset investment products along with a diversified product of a large-cap fund. The total asset under management (AUM) of the firm touched $2.8 billion on July 9, out of which GBTC holds $2.66 billion. Each share of the trust represents 0.00097876 Bitcoin.
7/8/19 UPDATE: Holdings per share, net assets under management and digital assets per share for our investment products.
— Grayscale (@GrayscaleInvest) July 8, 2019
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The announcement also detailed that there is a one-year holding period for the GBTC shares, and the company does not offer a redemption program. This creates a lack of liquidity as investors can’t exit even in a bear market.
“Following a one-year holding period, shareholders who invest in the private placement may elect to sell their shares at prices dictated by the market under the symbol: GBTC,” the company stated.
The company also warned that on a secondary market, the shares might be traded at a premium price or even at a discount to the actual value of Bitcoin held by the trust.
“Because of the one-year holding period and the lack of an ongoing redemption program, shares should not be purchased by any investor who is not willing and able to bear the risk of investment and lack of liquidity for at least one year. No assurances are given that after the one-year holding period, there will be any market for the resale of shares, or, if there is such a market, as to the price at such shares may be sold into such a market,” the announcement added.
Finance Magnates earlier reported that the firm is planning to list the shares of its Ethereum Trust on retail markets after receiving approval from the Financial Industry Regulatory Authority (FINRA).