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On October 6, Grayscale Investments announced a new venture that gives accredited investors the opportunity to invest in the mining infrastructure that powers the digital asset ecosystem. According to the announcement, the co-investment vehicle is called Grayscale Digital Infrastructure Opportunities (GDIO), and crypto mining firm Foundry will handle the new product’s operations. GDIO is intended to “capture the upside of crypto winters,” Grayscale’s Thursday announced details.
The world’s largest digital currency asset manager, Grayscale Investments, announced the launch of a new co-investment opportunity on Thursday, a financial vehicle that aims to take advantage of the crypto economy’s market cycles. The new co-investment product is the first of its kind for Grayscale and bitcoin mining, and venture infrastructure firm Foundry Digital will “manage the day-to-day operations” of the Grayscale Digital Infrastructure Opportunities (GDIO) co-investment vehicle.
Over the past 12 months, Foundry has been the largest bitcoin mining pool in terms of total hashrate. The firm’s mining pool captured 19.38% of the global hashrate this year, or roughly 10,375 of the 53,532 BTC blocks found in the past 12 months. The bear market has been troublesome for miners this year and Grayscale believes that the crypto winter could provide unique investment opportunities.
Grayscale’s investment thesis states:
As bitcoin prices have fallen dramatically, leveraged miners have experienced significant pressure on their operating margins. In the coming months, we expect that some miners will be forced to decommission their mining equipment. We believe GDIO will have an opportunity to purchase mining equipment at emergency levels and profitably mine bitcoin in the future.
For example, crypto miner Cleanspark explained last summer that the downturn in the crypto economy has presented “unprecedented opportunities.” In late June, a report noted that $4 billion in bitcoin mining loans were in distress. In September, Jihan Wu’s Bitdeer launched a $250 million fund to help distressed miners. Grayscale CEO Michael Sonnenshein says his firm has an advantage over the rest that allows Grayscale to find opportunities within the crypto winter cycle.
“Grayscale’s unique position at the center of the crypto ecosystem enables us to create offerings that allow investors to put capital to work through different market cycles,” Sonnenshein said during the announcement. “Our team has long been committed to lowering the barrier to investing in the crypto ecosystem – from direct exposure to digital assets, to diversified thematic products, and now infrastructure through GDIO.”
What do you think about Grayscale’s co-investment vehicle that aims to find opportunities in the crypto winter and market cycles? Let us know what you think about this topic in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons, Grayscale logo
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