Bitcoin Cash Trust Issues New Shares: Investment Opportunity.
Grayscale Bitcoin Cash Trust BCHG, the most popular investment product related to digital currencies, has closed a private placement of 863500 shares which has reportedly raised more than $2.6 million in Bitcoin cash. The step is considered as increased demand for exposure through a traditional investment vehicle in Bitcoin cash. So far, as of today, the Trust has 44,003,500 shares outstanding.
We will discuss what this development means for the BCH ecosystem and the benefit of investing through Grayscale's platform, the regulatory framework that these shares are issued under, and how one can benefit from this volatile yet promising BCH market.
Why Grayscale Bitcoin Cash Trust?
The Grayscale Bitcoin Cash Trust simplifies the investment in BCH for the interested persons without necessarily having to deal with the hassle of how to buy and store it. And because Grayscale is an ongoing continuous issuer of new shares, the accredited investor is now able to earn in BCH price from its regulatory environment.
Grayscale Securities, LLC is the authorized participant that sells shares privately. The sale is under Rule 506(c) of Regulation D, which simply requires that purchases be limited to accredited investors only. This enables them to conduct private placements without full-blown procedural requirements found in a public offer. It has made Grayscale very popular even among institutions and individuals.
What is BCH?
Bitcoin Cash is one of the most popularly created cryptocurrencies that resulted from a hard fork of Bitcoin in 2017. In an aim to try to reform its scalability issues, it went ahead to raise block size limits to process more transactions on its blockchain. It has been quite the journey and has morphed into pretty good competition in the world of digital currency, ".
It has been on a daily increasing trend as more merchants and platforms accept payments in BCH. Grayscale's Bitcoin Cash Trust allows investors to tap the potential of growth and utility in the cryptocurrency market.
Key Transactions and Share Issuance
Since the launch of the Grayscale Bitcoin Cash Trust, it has issued multiple shares. Let us dig into some of the most critical transactions:
- 863,500 shares: recently issued to accredited investors and raised in total 7,315.78 BCH worth $2.66 million.
- 536,700 shares: Accumulating earlier issuance worth 4,556.10 BCH valued at $1.51 million
- 861,000 shares: A total of 7,321.89 BCH worth $2.53 million was also raised
- 635,300 shares: Issued amount that will amount to the accumulation of 5,415.27 BCH which is about $2.16 million
- 741,000 shares, equating to which resulted in accretion of 6,318.79 BCH worth $2.35 million.
This magnitude of share sales says a lot for the interest generated towards Bitcoin Cash as an investment avenue. The Grayscale shares paired with the value in BCH open the channels for institutional and high-net-worth individuals into investing in the crypto space without necessarily depriving oneself of funds required in a buying process.
Volatility and Market Sentiment
Price Volatility The most extraordinary feature of Bitcoin Cash- and, for that matter, any cryptocurrency in general-is its price volatility. According to InvestingPro, the Grayscale Bitcoin Cash Trust has already risen by 309.18% year over year. On the other hand, BCH has declined by 29.96% in the last three months.
That is rather common in the world of cryptocurrencies wherein opinions on market sentiment can change overnight due to news, global economic factors, or investor behavior. That being said, the Grayscale Bitcoin Cash Trust therefore allows investors to be exposed to that volatility and perhaps reap the fruits of price movements for considerable returns.
However, while volatility comes with risks, it also opens avenues. All risks attendant to such products must be heeded by investors, and a deep knowledge of those products must be ascertained before any investment is entered into cryptocurrency-related products.
Grayscale Securities Contribution
The above-discussed share transactions will therefore be possible with the help of Grayscale Securities, LLC. As the authorized participant to the Bitcoin Cash Trust, it issues new shares. The pre-existing U.S. securities law may perceive Grayscale Securities as an "underwriter" in the perspective of those private placements, within the definition of the Securities Act of 1933.
Most importantly, underwriting discounts or commissions were not paid on the sales of shares. That would be able to make investing in Grayscale Bitcoin Cash Trust more enticing for people who want to avoid being overcharged with fees.
Regulatory Framework
The private placements under Rule 506(c) of Regulation D for Grayscale are also exempt from the registration requirements. This implies that the firm is allowed to solicit accredited investors, and therefore will not be encumbered by the very expensive and cumbersome procedure in registration from the SEC.
While this exemption does indeed save some time, it does limit the actual availability of participation in these offerings to accredited investors. Under definition by the SEC, an accredited investor is a person who falls into at least one of two categories: a person with the required income or whose net worth is at a certain level.
Grayscale does strive hard to try to comply with all of these regulations by ensuring that its Bitcoin Cash Trust operates within the confines of the law completely, thus making the option safe and compliant for an accredited investor to invest in.
Grayscale's Position in the Ecosystem of Cryptocurrencies
Over the past years, Grayscale has become one of the leading providers of investment products in digital currency. The portfolio includes most of the important cryptocurrencies. Among those are Bitcoin, Ethereum, Litecoin, even Bitcoin Cash. This is what has allowed old-school investors to start exposing themselves to digital assets and do not necessarily need to own them.
Bitcoin Cash Trust is one of the examples on how this company fills in the traditional financial world and the new world of cryptocurrencies. The more institutional investors entering the crypto space, the more regulated and safe investment means Grayscale's products are.
Why Invest in Grayscale Bitcoin Cash Trust?
There are quite a few advantages for investing in the Grayscale Bitcoin Cash Trust:
1. Simplified Investment: Grayscale simplifies investment in BCH to investors; it saves them from the whole hassle of actually buying, storing, and managing their cryptocurrency.
.2 Regulated Environment: Trust works in a regulated environment that helps to mitigate any risks in what might otherwise be an unregulated market.
3. Institutional-Grade Security: The institutional-grade security locks the assets with almost negligible risk of theft and loss.
4. Tax Benefits: The shareholders can avail themselves of tax benefits as holding shares in the trust may be advisable over holding BCH directly from a jurisdiction perspective.
5. Liquidity: Grayscale Bitcoin Cash Trust is listed on the over-the-counter market; hence, investors can sell their shares when they require liquidity.
The Future of Bitcoin Cash and Grayscale Trust
As the cryptocurrency market continues to grow, entities such as the Grayscale Bitcoin Cash Trust will very likely be important drivers for the adoption of digital assets by institutional users. As every day practical use of cryptocurrencies increases, entities centered on fast, lower cost transactions like Bitcoin Cash are best positioned for a pure play larger share of the market.
The ongoing share issuance from Grayscale demonstrates continued confidence about the long-term potential of BCH. Whether it is any short-term volatility or fluctuations in the market, the increasing adoption of BCH by merchants, developers, and users continues to shine bright lights onto the horizon regarding Bitcoin Cash.
Conclusion
The Grayscale Bitcoin Cash Trust has issued more shares, which has implications of increased interest in Bitcoin Cash as an investment asset. Meanwhile, Grayscale facilitates the incorporation of digital currency into more traditional financial structures through a regulated and safe entry points for accredited investors to access BCH.
Bitcoin Cash continues to expand and grow-new technologies and adoption propel this space forward within the crypto ecosystem. For the investor seeking exposure to the crypto market but not wanting to directly hold the asset, the Grayscale Bitcoin Cash Trust has an attractive offering.
Stay on top of this and more in our weekly news roundup for Bitcoin Cash and the broader crypto markets.
Lead Image Source - Pixabay