Grayscale Reveals Record 1Q20 Institutional Crypto Investments


Grayscale Investments – the world’s largest digital asset’s investment fund released new data for Q1 2020, which shows that amidst the economic slowdown, institutional interest and their exposure to the cryptocurrencies has increased considerably. The total investment into Grayscale products for Q1 2020 was $503.7M, which is the largest quarterly raise in the fund’s history (the previous high was $254.8M in Q3 2019). Grayscale Bitcoin Trust experienced record quarterly inflow of $388.9M, while Grayscale Ethereum Trust managed $110M, the remaining $4.8M was distributed amongst the rest of the Grayscale crypto products. The Grayscale Investments now holds about 1.7% of the Bitcoin’s circulating supply and the assets under its management (AUM) represent 1.2% of the total digital assets market capitalization.

It is worth noting that majority of the crypto investments (88%) came from institutional investors, dominated by hedge funds and the new investors brought in $160.1M. The nature of these hedge funds is broadly mixed. The total crypto investments in all of Grayscale products, since the fund started in 2013, have now reached $1.68B. A large number of investors (38%) are also diversifying across different digital asset products in the Grayscale family (the same diversification percentage was 29% in 1Q19).

Last Year Grayscale Crypto Investments

Grayscale – the crypto investment fund had a record last year too. The data reveals that inflows into the fund, over the last 12 months, reached a staggering $1.07B with the majority of the investments (79%) coming from institutional investors, again dominated by hedge funds.

What Does The Grayscale Crypto Investments Data Reveal?

The Grayscale crypto investment’s data indicates that investors (primarily institutional) are increasing their holdings in the digital asset class, despite the economic slowdown and the risky volatile nature of crypto-assets. Many investors are waking up to the fact that digital assets should be a core component of their investment portfolios and they are increasing their exposure, at the fastest pace in the fund’s history. Grayscale report also notes that demand is reaching peak levels and investors are looking to hedge against the stock markets sell off and the decline in the traditional asset’s price.

The report also points that almost half of the inflows came from retirement accounts and 401Ks, demonstrating investor’s commitment in holding the digital assets for long term and a shared optimism in the future of the crypto-assets. Plus most investors are now diversifying their investments within the fund’s product range than ever before. A strategy which points to higher risk appetite and a deeper search for new uncorrelated assets, which can provide significant returns in an uncertain broadly volatile investment environment.

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