As per norm, GBTC files form 8-k with the SEC (Securities and Exchange Commission) whenever there is a change in holdings, revealing its Bitcoin dealings. However, the last filing was made on June 25, when the company held 20,000 BTC.
As per second quarter report, GBTC was investing close to $57.80 million per week in investments.
The spokesperson of Grayscale informed that the discontinuation in BTC buying is temporary and was due to administrative related tasks:
“There was an administrative quiet period for the Grayscale Bitcoin Trust private placement. The Trust is now open for subscription as of Friday, July 10 at 4:00pm ET.”
At any rate, Grayscale has not made any disclosures to SEC about fresh Bitcoin purchases after June 25. It should be remembered that GBTC is not a hedge fund that purchases assets on anticipation of benefiting from them afterwards. Rather, it purchases Bitcoin as and when investors acquire its shares. As of date, each share reflects 0.00095891 BTC.
In Q2, 84% of investments in Grayscale were made by institutional investors, primarily hedge funds. The company also demonstrated its ability to purchase more Bitcoin than mined:
“After Bitcoin’s halving in May, 2Q20 inflows into Grayscale Bitcoin Trust surpassed the number of newly-mined Bitcoin over the same period. With so much inflow to Grayscale Bitcoin Trust relative to newly-mined Bitcoin, there is a significant reduction in supply-side pressure, which may be a positive sign for Bitcoin price appreciation.”
There are a handful of descriptions to the sudden halt in investment activity. The first one is seasonal i.e., July is generally a dull period for investment operations.
Second reason could be that asset managers may have gone on a tour or have taken a break. Finally, Bitcoin could be trading in an extremely narrow range.
While the rebound of Bitcoin, following Black Thursday, has once again caught the attention of investors who were losing heavily in conventional markets, and were distressed by the vagueness from never seen stimulus packages. Beginning in early May, Bitcoin has been range bound.