According to a tweet by Ryan Selkis, CEO of blockchain research firm Messari, Grayscale Bitcoin Trust's (GBTC) controlling shareholders Genesis Global and Digital Currency Group cannot simply dump their holdings to raise more capital. Selkis explained that Rule 144A of the U.S. Securities Act of 1933 requires that issuers of OTC-traded entities give advance notice of proposed sales, and imposes a quarterly sales cap of either 1% of outstanding shares or weekly traded volume. 

Based on calculations provided by Selkis, this works to a maximum of $62 million in liquidations per quarter based on the outstanding shares test and $23 million in liquidations per quarter based on the trading volume test. "It's *much* more likely DCG-Genesis refinance using GBTC as collateral," he wrote.

Grayscale Bitcoin Trust, the largest Bitcoin 

BTC

$16,799

 investment trust in the world, is currently trading at a discount to net asset value (NAV) of 40% due to liquidity issues surrounding its operator Genesis Global and rumors of insolvency surrounding its owner, Digital Currency Group. It is said that Digital Currency Group bought nearly $800 million worth of GBTC shares since they began trading at a discount to NAV. The firm and its affiliates now own roughly 10% of the trust's outstanding shares.

After Genesis Global began halting withdrawals on Nov. 16, rumors began circulating that Digital Currency Group was also in a state of insolvency and would need to liquidate GBTC to pay back its creditors. Grayscale has since clarified that "the laws, regulations, and documents that define Grayscale's digital asset products prohibit the digital assets underlying the products from being lent, borrowed, or otherwise encumbered" and that "the $BTC underlying Grayscale Bitcoin Trust are owned by $GBTC and $GBTC alone."

Grayscale also published a letter signed by Coinbase's chief financial officer, Alesia Haas, and CEO of Coinbase Custody, Aaron Schnarch, showing that it currently holds 635,235 BTC under custody in Grayscale's name.