Investments in Grayscale Crypto Products Cross $1 Billion in Q3

Investments in Grayscale Crypto Products Cross $1 Billion in Q3

October 14, 2020

New York-based crypto-fund manager Grayscale today reported a record $1.05 billion in crypto inflows in the third quarter of 2020, surpassing its previous record set in Q2 at $906 million. The new data suggest that institutional investors, dominated by hedge funds, have been scooping up Bitcoin products, despite a historically tumultuous market.

According to Grayscale, the figures show strong and sustained evidence that investors are increasing their digital asset exposure.

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Investments into the company’s flagship Grayscale Bitcoin Trust (GBTC) hit $719.3 million during the July-September quarter, averaging $55.3 million per week, down from $57.8 million in the Q2 . The Trust has seen its assets under management surge from $1.9 billion to $4.8 billion YTD.

At the end of September, the company’s total assets under management since inception seven years ago totaled approximately $3.6 billion.

For the first time, inflows into Grayscale products over in a three-month time frame crossed the $1 billion threshold. Cumulative investment across the Grayscale family of products has reached $2.4 billion YTD, more than double the $1.2 billion cumulative inflow from 2013 to 2019.

Grayscale Litecoin Trust performed the best

Besides institutional investors, which accounted for 84 percent of the total investment in the third quarter, Grayscale said accredited individuals, retirement accounts and family offices increased their involvement. While mostly dominated by hedge funds, family offices were a much larger portion of inflows during 3Q20, representing over 8% of the total.

In addition, following the record quarter, Grayscale® Ethereum Trust now holds approximately 13 percent of the entire inflows into the Grayscale products, the company noted on Wednesday. The average commitment from institutional investors during 3Q20 was $2.9 million, up from $2.3 million in 3Q19.

Grayscale’s Bitcoin Trust, however, accounts for the bulk of the Q3 investments, with an inflow of $719.3 million.

Grayscale’s other products have also outperformed, with Bitcoin Cash, Litecoin, and Digital Large Cap products have combined exceeded $110 million of inflows during the last three months. Notably, inflows into Grayscale’s Litecoin Trust also saw its largest figure to date, with an increase of over 1,800% from 2Q20

Grayscale Investments, a unit of Barry Silbert’s Digital Currency Group, has previously filed with the Securities and Exchange Commission to list its Bitcoin Investment Trust as an exchange-traded fund in a $500 million initial public offering. The request was filed in 2017, only to withdraw after the SEC denied the Winklevoss ETF.

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