The bullish rally of Bitcoin in 2023 has boosted the revenues of the cryptocurrency company Digital Currency Group (DGC), which in the fourth quarter of 2023 recorded a 59% increase in revenues, mainly thanks to the performance of the Grayscale Bitcoin Trust.
Summary
Digital Currency Group (DCG) sees revenue rise in the last quarter of 2023 thanks to the increase in the price of Bitcoin
Digital Currency Group (DCG), the parent company of Grayscale and its Bitcoin Trust, stated on Monday in a letter to investors that company revenues reached record numbers in the last quarter of 2023.
In particular, revenues have increased by 59% compared to the same period of the previous year, with a net total of 210 million dollars.
DCG, which controls not only Grayscale but also Foundry, Genesis, and Luno, has revealed that the appreciation of bitcoin throughout 2023 made the difference in boosting the company’s revenues.
In addition, it has reported that the EBITDA (gross operating margin) for the fourth quarter has jumped to 99 million dollars compared to a negative value of 7 million dollars in the same period of 2022.
Here is what is reported in the letter to the shareholders:
“For the fiscal year 2023, DCG’s consolidated revenues were $749 million with an EBITDA of $275 million.”
As of December 31, 2023, the parent holding company reports a variety of assets within its investment portfolio, including tokens, GBTC shares, venture investments, and public stocks, valued at 975 million dollars.
It is clear that the Grayscale Bitcoin Trust (GBTC) has played a crucial role in consolidating the gains of the DGC portfolio, with the fund increasing by 330% in the last year and reducing the discount on NAV by about 45 percentage points from its February 2023 low.
The sale of the online newspaper Coindesk, which was sold on November 20, 2023 to the institutional digital asset exchange Bullish, has also been of great help in increasing the company’s liquid availability.
It is also worth noting that unfortunately Digital Currency Group is still involved in a legal case with its subsidiary Genesis, which about a year ago filed for bankruptcy.
The Attorney General of New York believes that Genesis, together with Gemini, defrauded over 230,000 investors for more than 3 billion dollars.
Meanwhile, Genesis itself has resolved a case with the SEC by paying a fine of 21 million dollars.
BTC outflows from Grayscale Bitcoin Trust slowing down: Blackrock and Fidelity lead positive inflows
Grayscale Bitcoin Trust, an investment fund (converted to an ETF in January) controlled by DCG, is experiencing significant slowdowns in outflows of BTC.
From January 17th to 26th, GBTC has daily unloaded more than 10,000 BTC, strongly contributing to the correction of crypto asset prices.
However, from January 27 onwards, the numbers gradually started to slow down, reaching yesterday’s “minimum” of 1,147 BTC withdrawn.
At the launch of the new ETF, some investors in the Grayscale Trust preferred to sell their shares as they had appreciated due to the contraction of the discount on NAV and obviously the rise in the price of the underlying bitcoin.
In addition, many have preferred to move to other investment products that offer lower fees and management costs.
The trend of Grayscale outflows is crucial to understand the directionality of the crypto market, considering that the price action of Bitcoin at this historical moment is exclusively driven by data on the overall netflow of all ETFs.
Since the other exchange traded funds are much younger compared to Grayscale’s, it is normal that in this initial phase they record much more inflows than outflows, as there is still no “substance” to sell.
The overall picture of the new bitcoin ETFs sees Grayscale gradually unloading BTC on a daily basis, but at an increasingly slower pace, while other Fund Managers like BlackRock, Fidelity, and Ark lead the bullish sentiment by attracting new BTC every day.
Currently, Wall Street is maintaining a highly positive netflow, with spot EFs buying approximately 12.5 times the BTC generated by the network through mining on a daily basis.
To underline, Grayscale still maintains dominance in this niche, with over a third of all trades taking place on its platform, and at the same time boasts the largest AUM of all, amounting to over 20 billion dollars.
