203,000 BTC: Grayscale Investments Now Holds Over 1% of Bitcoin's Circulating Supply

Grayscale, a digital currency investment firm established in 2013, now holds over 203,000 bitcoin (BTC) - an amount currently worth about $780 million according to CryptoCompare data.

According to LongHash’s research, this makes Grayscale - a subsidiary of the Digital Currency Group - the largest institutional holder of bitcoin, with more than 1% of bitcoin's current circulating supply of about 17.4 million coins.

BTC Investment Trust Trades "At 22% Premium" Over Bitcoin's Market Price

The large amount of BTC is held in Grayscale’s Bitcoin Investment Trust and its “shares are the first publicly quoted securities solely invested in and deriving value from the price of Bitcoin”, LongHash’s post explains.

Despite the long bear market this year, Grayscale has reportedly seen its investors adding to its “bitcoin position each month of 2018.” Moreover, the company’s BTC Investment Trust presently “trades at a 22% premium” over bitcoin’s average market price, which suggests that this type of financial instrument may be more appealing to accredited investors.

As CryptoGlobe reported on November 1st, Grayscale had released its Q3 2018 cryptoasset investment report. The year-to-date (YTD) summary of the report revealed that the investment firm had raised $329.5 million so far - in order to fund the ongoing development of its financial products.

Ethereum Classic (ETC) Investment Trust Is Worst Performing

The company’s financial outlook report also noted that the majority, 59%, of investments had come from its institutional clients. Notably, Grayscale’s management team had said that “new investment” into its products continued to remain “strong” - as it raised $81.1 million during Q3 2018. The majority of investments (59%) have come from institutional clients.

As covered (on November 22nd), the value of Grayscale’s assets under management dropped by almost $400 million due to the massive digital currency market sell-off - which has seen the market capitalization of the nascent asset class fall sharply from all-time highs of over $800 billion to currently around $125 billion.

Grayscale’s Ethereum Classic (ETC) Investment Trust has notably been one of its worst performing investments - as its value dropped from $42.5 million to $26.1 million, which was almost a 40% depreciation in a span of about 3 weeks (late October to November 22nd 2018).

Bitcoin’s Price Fails to Surpass $8,000 as Crypto Market Loses $12 Billion

The cryptocurrency space has recently lost about $12 billion in only 24 hours, at a time in which the flagship cryptocurrency bitcoin failed to remain above the $8,000 mark. The cryptocurrency has more than doubled in value so far this year, but is seemingly struggling to keep rising.

According to CryptoCompare data, one bitcoin is currently trading at $7,600 after falling 3.6% in the last 24-hour period. The cryptocurrency started seeing its price drop shortly after hitting $8,000, and has recovered from a $7,500 low in intraday trading.

Bitcoin's price performance in the last 24-hour period

The cryptocurrency’s price performance so far this year has seen interest in it grow, so much so that it hit a 14-month high in Google search interest this month.  Cameron Winklevoss, a co-founder of the popular Gemini cryptocurrency exchange, recently stated that investing in bitcoin is “not as crazy as sitting on the sidelines when the future of money is literally being built before your eyes.”

Despite the recent price drop, some analysts have revealed they’re bullish as BTC’s mining rewards halving event occurs next year. This, according to some, helps remind users of the cryptocurrency’s scarcity, as block rewards are cut in half.

The recent price drop could potentially be a delayed reaction to Tether, the company behind the popular USDT token, revealing it has invested some of its reserves in BTC and “other assets.” While some claim the firm bought extremely small amounts of crypto with its reserves, New York Supreme Court Judge Joel M. Cohen questioned the paradox, stating:

Tether sounded to me like sort of the calm in the storm of cryptocurrency trading. And so if Tether is backed by bitcoin, how is that consistent? If some of your assets are in a volatile currency that Tether is supposed to somehow modulate, that seems like it’s playing into what they are saying.

Bitcoin’s drop saw most top altcoins follow suit, with some dropping as much as 7% in the last 24-hour period. Litecoin, Bitcoin Cash and Zcash are among the least affected tokens, being down between 4% and 5.2%.

Ethereum’s ether, XRP, and XMR are all down by about 6% in said period, while other cryptocurrencies like Dash, Cardano, and QTUM dropped by as much as 10%. Bitcoin SV, which recently surged by 80% after Craig Wright filed a copyright registration for the Bitcoin whitepaper, is down by little over 1%.