Grayscale’s New Venture Targets Bitcoin Mining Bear Markets

Crypto asset management firm Grayscale is launching an investment vehicle that will enable investors to take advantage of the low pricing of bitcoin mining facilities amid a sustained crypto winter.

The private co-investment entity, Grayscale Digital Infrastructure Opportunities (GDIO), will partner with digital asset mining and staking infrastructure provider Foundry for its day-to-day operations, according to a release.

The crypto winter has undoubtedly been hard for the miners, who have seen profit margins fall as bitcoin values dropped more than 50% this year as power bills surged and money dried up.

This has directly harmed costs for infrastructures required for bitcoin mining, notably the highly specialized computers, which were in high demand during last year’s bull run, driving up prices to all-time highs, according to an index maintained by Luxor Technologies. Since then, the price of mining hardware has plummeted, with some of the top manufacturers, including Bitmain, providing deep discounts to move their mining rigs.

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Grayscale‘s unique position at the hub of the crypto ecosystem allows us to design options that allow investors to put capital to work over diverse market cycles,” said Grayscale CEO Michael Sonnenshein in the statement. He continued, “Our team has long been focused on decreasing the barrier for investing in the crypto ecosystem, from direct digital asset exposure to varied theme products, and now infrastructure through GDIO.”

Grayscale CEO Michael Sonnenshein
Grayscale CEO Michael Sonnenshein

Some players in the business have decided to pour cash into the mining sector while it is still struggling, seeing the bear market as an ideal time to build. “As part of Foundry’s aim to enable a decentralized infrastructure, we’re thrilled to join with Grayscale to widen the potential to invest in Bitcoin mining during this opportune time,” said Foundry CEO Michael Colyer.

Jihan Wu, the founder of Bitmain and a cryptocurrency tycoon, reportedly established a $250 million fund last month to buy troubled assets from mining companies. Meanwhile, decentralized finance (DeFi) business Maple Finance claimed that it is creating a loan pool with a $300 million capacity for mid-size bitcoin miners across North America and Australia.

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