Messari Founder Ryan Selkis shared some “net good news” for Grayscale Bitcoin Trust (GBTC) shareholders on Monday.

In a series of tweets, Selkis said that Digital Currency Group (DCG) and its subsidiary Genesis cannot “dump” GBTC on the market because of certain public market rules.

Because the GBTC is not an exchange traded fund (ETF) and is registered under Rule 144, its affiliates are subject to certain selling restrictions.

One of them is the notice of proposed sales, where an affiliate has to disclose a sale with the SEC if the sale amount exceeds 5,000 shares or a dollar amount greater than $50,000. A disclosure like this would likely spook the market, making any sale by DCG or Genesis one that would take place at depressed market prices.

The second rule, described by Selkis as “the greater of the two,” specifies that a Grayscale affiliate cannot sell securities in a three-month period that exceeds 1% of the outstanding shares of the same class being sold, or more than 1% of GBTC’s weekly trading volume in the four weeks prior to the sale.

“Since max allowable sales under the 1% test would be 3% of daily volume dumped on the offer side of the book, forced selling by DCG-Genesis would further depress prices AND telegraph sales to the market. It’s *much* more likely DCG-Genesis refinance using GBTC as collateral,” tweeted Selkis on Monday.

Last week, a report from the Financial Times revealed that DCG had bought $722 million shares of GBTC funded by borrowed funds from Genesis. The report detailed that these shares were purchased in March 2021, when GBTC traded at $40 per share.

Selkis pointed out that DCG’s board had authorized $1.2 billion share purchases of GBTC, but the current liquidity issues mean the remainder of $478 million is “likely on hold indefinitely.”

This especially holds true after DCG took possession of Genesis’s 35 million GBTC shares as part of Three Arrows Capital’s liquidated collateral in the second quarter, said Selkis.

“DCG and affiliates now own 10% of the trust [GBTC] shares, but these are highly illiquid,” he said.