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).

Grayscale Has Reportedly Been Buying $29.9 Million Worth of Bitcoin per Week

Francisco Memoria

Cryptocurrency asset manager Grayscale Investments has reportedly been buying around 33% of all newly minted bitcoin, as data shows it is buying around $29.9 million worth of the cryptocurrency every week.

According to Reddit user parakitej, in the 100 days preceding May 17, Grayscale’s Bitcoin Investment Trust (GBTC) added more than 60,000 BTC (over $500 million) to its holdings, as they rose from 283,192 BTC to a total of 343,954 BTC.

The redditor noted that 60,000 BTC in the last 100 days equals around one-third of all newly minted bitcoin, meaning demand from institutional investors has kept on growing this year.

For good measure, 60k bitcoins in last 100 days is about 33-34% of all newly minted bitcoins in that period, give or take. And Grayscale is just one of the many ETF’s that people who don’t want to fiddle with private keys etc, can use to acquire bitcoin, albeit the largest one.

Twitter analyst Kevin Rooke added that Grayscales Bitcoin Trust saw an average weekly investment of $29.9 million in the first quarter of the year, while it saw an average weekly investment of around $3.2 million in the first quarter of last year.

Grayscale runs several cryptocurrency investment products focused on institutional investors. It has over $3.6 billion worth of cryptocurrency under management, and its funds cover top cryptocurrencies like bitcoin, ether, bitcoin cash, zcash, XRP, and more.

The funds allow investors to gain exposure to top cryptocurrencies without actually having to manage private keys, and instead pay a management fee. As CryptoGlobe reported, Grayscale saw a record $500 million inflows in the first quarter of the year, nearly doubling its previous record high of $354.8 million in Q3 2019.

Its most popular funds are GBTC and its Ether Trust (ETHE), which saw institutional investors buy the dip in cryptocurrency markets earlier this year. In comparison Grayscale, a unit of the New York-. based Digital Currency Group, raised a total of $600 million in 2019.

Featured image via Unsplash.