Investments in Grayscale Bitcoin Trust Hit Record High Amid Economic Crisis
April 17, 2020
Grayscale Investments has announced the strongest quarter in its history. Investments into the company’s cryptocurrency products, including the flagship Grayscale Bitcoin Trust (GBTC), hit a record high in the first quarter. Of the total investment, 88% comes from institutional investors. The company now has $2.2 billion in assets under management.
Grayscale Investments announced its quarterly results on Thursday as the worldwide economic crisis escalates. “Despite the risk asset drawdown this quarter, Grayscale’s assets under management (‘AUM’) continues towards all-time highs, as does our share of the digital asset market,” the company wrote, tweeting:
Q1 2020 marks Grayscale’s strongest quarter yet, with over $500 million raised … that’s 83% of total capital raised for all of 2019, in just one quarter.
Specifically, the total investment into Grayscale crypto products in Q1 2020 amounted to $503.7 million, compared to $1.07 billion for the trailing 12 months. At the end of March, the company’s total assets under management since inception (Sept. 25, 2013) totaled approximately $2.2 billion.
The company explained that Q1 2020 was the “largest quarterly [investment] raise in Grayscale history,” which nearly doubled the previous quarterly high of $254.8 million in 3Q 2019. “For the first time, inflows into Grayscale products over a 12-month period crossed the $1 billion threshold ($1.07 billion) … Cumulative investment across the Grayscale family of products since inception has reached $1.68 billion,” the company revealed, noting:
Majority of investment (88%) came from institutional investors, dominated by hedge funds.
Besides institutional investors, accredited individuals accounted for 5% of the total investment in the first quarter, followed by retirement accounts (4%) and family offices (3%).
These crypto products are private investment vehicles. Except for Grayscale Bitcoin Trust, these products are not registered with the U.S. Securities and Exchange Commission (SEC) or any other regulators. However, some are publicly quoted on OTCQX under the Alternative Reporting Standards: GBTC, Ethereum Trust, Ethereum Classic Trust, and Digital Large Cap Fund (GDLC).
In addition, following the record quarter, Grayscale Bitcoin Trust now holds approximately 1.7% of the entire circulating bitcoin supply, the company noted on Thursday, elaborating:
New investors accounted for $160.1 million in inflows. Grayscale Bitcoin Trust and Grayscale Ethereum Trust both experienced record quarterly inflows of $388.9 million and $110.0 million, respectively.
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