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Grayscale - the largest cryptocurrency asset manager in the world - has announced a new investment product offering exposure to Bitcoin mining equipment.
The fund will raise money to buy Bitcoin asic machines, which will be operated by the digital foundry at the mine and sell Bitcoin for investors.
Grayscale’s Strategic Mining Play
According to Grayscale’s website, Grayscale Digital Infrastructure Opportunities LLC (GDIO) is aimed at creating an income stream that differentiates itself from “traditional income-oriented investments.”
Grayscale Strategic Mining PlayOn Grayscale's website, Grayscale Digital Infrastructure Opportunities LLC (GDIO) aims to create a revenue stream that differs from "traditional income-focused investing."
“After talking with Mike Colyer [CEO of Foundry] and the Foundry team about crypto winter, we agreed there was an opportunity to connect investors directly with crypto mining,” said Grayscale CEO Michael Sonnenshein over Twitter on Thursday. "After discussions with Mike Colyer [Foundry CEO] and the Cryptographic Winter Foundry team, we agreed there was an opportunity to directly link investors to crypto mining," Grayscale CEO Michael Sonnenshein told Twitter on Thursday.
"GDIO is the bottom line." Some of those firms included Bitcoin miners, which saw their effective profits from minting new Bitcoin decline in exact proportion with its price.
Since mining is now less profitable than during the bearish market, a central point of gdio's investment thesis is the possibility of purchasing Bitcoin extraction machines at levels in difficulty.
The organisation bets on bitcoin going back to higher prices at the bottom of the line, in a four-step mining cycle: the "rising bull", the "gold rush", the "stocktaking flush" and the "shakeout".
Grayscale said the mining cycle has now moved into its 'inventory flush' phase, where the hash rate remains high. Bitcoin price has declined substantially.
The later "shakeout", according to the theory, will lead to a decrease in grinding speed that miners are forced to shut down their machines.
"Historically, the deployment of capital in a "shakeout" phase and going out in a "gold rush" phase is the most cost-effective," said the company.
"Historically, the deployment of capital into a "Shakeout" phase and the exit into a "Gold Rush" phase is the most cost-effective," the company said.
The proceeds are only available to qualified investors and require a minimum investment of $25,000. A long-term commitment made and made a recorded discussion about their partnership in person.
Both Sonnhenshein and Colyer discussed their partnership in writing in person.”
For the Foundry, Colyer pointed out that now is "a great time to start bending, and start investing in space.
For foundry, Colyer pointed out that now is "a very good time to begin bending, and beginning to invest in space." we think there will be plenty of opportunities to keep building the network... and we think long term, This is a great investment." Grayscale currently owns the world's largest Bitcoin fund, responsible for holding more than 600,000 Bitcoin worth about 12.7 billion dollars.
This represents over 3 per cent of the total network supply. However, the Grayscale Bitcoin Trust (GBTC) is currently trading at one of its highest discount rates ever – meaning its share value is less than the underlying Bitcoin it’s supposed to represent.
