Tag: Grayscale

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Bitcoin Crypto News

Grayscale Resumes Massive Bitcoin Buys, Adds +10K BTC Within a Week

Grayscale Resumes Massive Bitcoin Buys, Adds +10K BTC Within a Week

The leading digital assets investment company, Grayscale has resumed its massive Bitcoin (BTC) purchases just a few days after it reopened the Bitcoin Trust product for new investments. Oftentimes, the company buys more than BTC miners could mine in a single day. This somewhat indicates that there is still a growing interest in Bitcoin among institutional investors.

Massive purchases like this create scarcity for the leading cryptocurrency, which should be a good sign in the long term.

Grayscale Stacks +10K Bitcoin 

Since December 21, the digital asset investment company stopped accepting new investment to its Bitcoin Trust, and five other large-cap funds like the Ethereum Trust, Ethereum Classic, Litecoin, etc. This is no longer an unusual move from the company, as it’s now understood to be a periodic tradition, where Grayscale reportedly closes the crypto products to “private placement” rounds.

Despite suspending new investments in the crypto products, especially the Bitcoin Trust fund, the company bought more Bitcoin a few days after the announcement. 

A day after the Bitcoin Trust was resumed for new investments on January 13, the company bought over 2,000 Bitcoin, which is worth more than US$74 million, following the current price of the cryptocurrency at US$37,215. Presently, Grayscale’s Bitcoin holding is sitting at 618.56K, according to the information on ByBt. This means that the company added 8,000 Bitcoin in two days after the first purchase of the week. Thus, Grayscale stacked over 10,000 BTC within three days. 

Following the current BTC holding, the Grayscale Bitcoin Trust fund has a valuation of US$23 billion.

Why it Matters

At first, these massive BTC purchases from Grayscale shows there is a steadily growing interest by institutions to hold Bitcoin. As the demand continues to grow on the platform, we are likely to see bigger buys by Grayscale, which creates scarcity for Bitcoin in the crypto market. Basically, the price of an asset is expected to increase when demand is greater than the asset’s supply rate.

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Bitcoin Institutions

Concerns Of Bitcoin Illiquidity as Institutions Rack up Bitcoin With only 20% of Available Supply

Recently, Grayscale released its total Assets Under Management (AUD), with a total of $20B worth of Bitcoin, surpassing the total amount of BTC mined throughout 2020.

With more details, Grayscale amassed a total of 72,950 BTC, almost 3X mined last year, according to Coin98 Analytics:

Data shown by Coin98

The recent data heated the topic in the crypto community on how financial institutions are squeezing the Bitcoin supply. Credit card companies like PayPal and Visa embraced cryptocurrencies noticing the increasing general demand for better stores of value. But BTC has a limited supply, a key aspect of this scenario.

Net assets under management of Grayscale. Source: Twitter


Not surprisingly, when institutions decided to hoard Bitcoin, the bull run escalated, and BTC and crypto were achieving a broader space on social networks. However, this recent massive accumulation of BTC has raised concerns about it.

How Much BTC Is Left For Retail Traders Then?

According to data from Glassnode, Bitcoin is on a stage where the illiquid supply is greater than the liquid supply, which is what is driving the current bull run on BTC. Out of the total 70 % Bitcoin supply, only 20% is available for trading on exchanges. Likewise, another reason behind the current decrease is the shortage of ASIC miners.

Our analysis shows that currently 78% of the circulating Bitcoin supply (14.5 million BTC) can be classified as being illiquid. A trend that has been increasing over the course of 2020 and paints a potential bullish picture for Bitcoin in the upcoming months, as less BTC are available in the network to be bought.

Stated the company
Source: Glassnode

The massive adoption of crypto by institutions sets the bullish scenario, as miners are producing and selling less – plus the lost BTCs and the holders make the BTC supply small, driving the price up.

Another topic discussed in crypto forums is —ironically— a possible fully centralized scenario for Bitcoin, as institutions hoard massive amounts of BTC, drying the supply and changing the original decentralized concept.

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Bitcoin Institutions

Institutional Call? Nasdaq-listed Mogo Will Invest $1M in Bitcoin

Bitcoin Outperformed Oil, Gold With Over 100% Increase in Q1 2021

As crypto analysts expect that institutions will make massive investments in Bitcoin (BTC) in the coming years, many publicly-listed companies are already confirming these sentiments in 2020. Recently, the likes of MassMutual, an insurance company, invested about US$100 million in the cryptocurrency. Also, MicroStrategy completed its Bitcoin investment to US$1 billion in recent days.

Today, a popular Canadian financial technology company, Mogo, has disclosed its plans to invest more than US$1 million in Bitcoin.

The Institutions are Here!

The Nasdaq-listed company said on Wednesday that it’s planning to buy US$1.16 million worth of Bitcoin as corporate investment. With such capital, the company will be able to get about 47.1 Bitcoin, following the current price of the crypto at US$23,579 on Coinmarketcap.

Meanwhile, Mogo further revealed plans to buy additional Bitcoin in the coming year. Judging by this, one can easily predict that the company may invest in the cryptocurrency at any time soon. 

The Bitcoin will be purchased from the company’s US$13.2 million investment portfolio. “We are strong believers in bitcoin as an asset class and believe this investment is consistent with our goal to make bitcoin investing available to all Canadians,” according to the president and CFO of Mogo, Greg Feller. 

It’s also worth mentioning that other prominent companies like Square, Galaxy Digital, etc., are holding some Bitcoin as corporate investment.

Bitcoin Adoptions Grows With Price Performance

Since the leading cryptocurrency broke the US$20,000 level, there has been a massive interest in it among institutional and retail investors. This is evident following the growing number of BTC addresses. Also, the institutional-grade investment companies, especially Grayscale, have been recording incredible growth in its assets under management (AUM). 

Despite that Grayscale stopped accepting funds from new investors on its crypto products, it still bought over 12,000 BTC today, which came from its existing client alone. Currently, the company’s AUM is worth $15.9 billion. 

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Bitcoin Institutions

Institutional Demand Pushes Grayscale’s AUM to $13 Billion

Institutional Demand Pushes Grayscale’s AUM to $13 Billion

It’s no doubt that there is currently a strong and growing interest in Bitcoin (BTC) and other digital currencies from institutional investors. This is evident as institutional-grade digital assets investment companies, especially Grayscale Investment, are seeing an exponential kind of demand for crypto products. 

Earlier today, the largest crypto investment company disclosed on Twitter that its assets under management had surpassed another milestone valuation of US$13 billion.

Grayscale AUM Hits ATH

The company offers about ten investment products tied to popular digital currencies such as Bitcoin, Ether (ETH), Ripple (XRP), Litecoin (LTC), and others. Overall, the Grayscale Bitcoin Trust product accounts for about 83 percent of the entire AUM, with a total valuation of US$10.8 billion. For a long time, institutional investors had shown more interest in holding the BTC product on Grayscale. But, not only Bitcoin.

The second-largest crypto also gained more than US$1.7 billion from institutions on Grayscale. For the context, the Bitcoin and Ether products account for more than 95 percent of the company’s net asset under management. Litecoin is one other cryptocurrency that made a significant increase. The LTC product surged from US$48.9 million on November 13 to US$74.8 million, per the report today.

The Institutions are Coming

Aside from Grayscale, the increasing flow of funds from institutional investors to Bitcoin can also be seen in BTC derivatives trading platforms like the Chicago Merchantile Exchange (CME) and Bakkt. These platforms recently witnessed high stats in Bitcoin futures open interest and volume. JPMorgan Chase, a leading financial services company in the United States, expect US$600 billion from institutions to flow into Bitcoin in the coming years.

The prediction was stirred after reports informed that a US mutual insurance company, MassMutual, invested about US$100 million in Bitcoin. The banks believe that more insurance companies and pension funds are going to follow suit.

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Bitcoin

Grayscale’s Exec Thinks Bitcoin Rally is Just Getting Started

Bitcoin Outperformed Oil, Gold With Over 100% Increase in Q1 2021

Grayscale Investment, an institutional-grade digital assets investment platform, has been on the upside with its assets under management (AUM). To be precise, the company has been purchasing a massive number of Bitcoin (BTC), more than miners could mine in one week. Following the increasing inflows in Grayscale, the managing director, Michael Sonnenshein, opined that such development indicates that Bitcoin is still going to do more, as the rally is just getting started.

Bitcoin Rally Isn’t Over

While speaking at CNBC’s Squawk Box on Monday, the Grayscale executive admitted that the company has been recording a huge growth in its crypto investments products. The institutional investment company provides investors exposure to cryptocurrencies via its Trust Funds, which covers Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, and five other crypto products. 

When asked about the records with these products, Sonnenshein said that all the ten crypto investment vehicles are gaining huge inflows. According to Sonnenshein, the rally with the leading cryptocurrency is just getting started, if the massive capital inflows in the company indicate the current investors accumulating Bitcoin.

Grayscale Bitcoin Purchase

One evidence for the increasing capital inflows in Grayscale stands to be the Bitcoin purchases in recent weeks. The company accumulates more than miners can sell in a single week. For instance, Grayscale reportedly purchased more than 7,300 Bitcoin in the past week alone. Following Bitcoin’s price (US$19,362) at the time of writing, the latest weekly purchase is worth over US$141 million. Bitcoin miners are no longer meeting the demand in the market.

For every new block, miners received 6.25 BTC. Bitcoin miners only produce about 144 blocks daily on average. This means that, for every new week, about 6,300 new Bitcoin are added to the current circulating supply. When comparing the supply rate for Bitcoin with the current trends, it clear that there is a high demand for the cryptocurrency. This is probably one factor behind the rising price of Bitcoin, as the value of an asset is more likely to surge when the demand is greater than it sells.