Grayscale Digital Asset Manager Sees 84% of Inflows From Institutions

Neil Dennis

Grayscale, the digital assets fund manager, revealed its strongest quarterly inflows in a year during the second three months of 2019, as 84% of investments in the period came from institutions.

The company, with manages its flagship Grayscale Bitcoin Trust, said across all its investment products it raised $84.4 million - a near 100% increase in quarter-on-quarter product inflows - with the majority - 84% - coming institutional investors, dominated by hedge funds.

The company said in its quarterly report:

This quarter, institutional investors comprised the highest percentage of total demand for Grayscale products since we began publishing this report in July 2018.

Bitcoin Trust Leads the Way

Primary among these, as the price of bitcoin rallied to 18-month highs during the quarter, was the flagship Bitcoin Trust fund, with average weekly investment into the vehicle hitting $4.1 million. Grayscale praised all of its investment products, which all made positive quarterly contributions for the first time. The report said: 

The digital asset market rebound gained momentum in the second quarter as all ten investment vehicles in the Grayscale family of products generated positive performance net of fees.

Total assets under management at Grayscale nearly tripled from $926 million to $2.7 billion thanks to the digital asset market resurgence. The company added:

This growth demonstrates that the recent rally in digital asset prices is supported by fresh investment.

Growth in Altcoin Products

Grayscale also noted "early signs" that an altcoin investment cycle could be starting as these products accounted for 24% of fresh capital, led by inflows into its Ethereum Trust - $14 million - and Ethereum Classic Trust - $5.5 million.

The company said:

While most of the capital invested into Grayscale Ethereum Trust came in June, Grayscale Ethereum Classic Trust saw twelve consecutive weeks of new inflows through the end of the quarter.