Grayscale's New Co-Investment Vehicle Aims to 'Capture the Upside of Crypto Winter'

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 the crypto mining firm Foundry will handle the new product’s operations. GDIO is meant to “capture the upside of crypto winter,” Grayscale’s announcement on Thursday details.

Grayscale’s New Co-Investment Vehicle GDIO Looks for Opportunities Within the Crypto Economy’s Market Cycles — Day-to-Day Operations to be Managed by Foundry Digital

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 the bitcoin mining, and staking infrastructure firm Foundry Digital will “manage the day-to-day operations” of the Grayscale Digital Infrastructure Opportunities (GDIO) co-investment vehicle.

During the last 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 discovered roughly 10,375 out of the 53,532 BTC blocks found during the past 12 months. The bear market has been troublesome for miners this year and Grayscale believes that the crypto winter can provide unique opportunities for investment.

Grayscale’s investment thesis states:

As bitcoin prices have fallen dramatically, leveraged miners have experienced meaningful pressure on their operating margins. In the coming months, we anticipate that some miners will be forced to liquidate their mining equipment. We believe GDIO will have an opportunity to purchase mining equipment at distressed levels and to profitably mine bitcoin in the future.

For instance, the crypto miner Cleanspark explained this past summer that the crypto economy’s downturn has produced “unprecedented opportunities.” At the end of June, a report noted that $4 billion in bitcoin mining loans were in distress. Moreover, In September, Jihan Wu’s Bitdeer launched a $250 million fund to help distressed miners. Grayscale CEO Michael Sonnenshein says his firm has an edge above 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 differing market cycles,” Sonnenshein remarked during the announcement. “Our team has long been committed to lowering the barrier for investing in the crypto ecosystem – from direct digital asset exposure, to diversified thematic products, and now infrastructure through GDIO.”