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Investment fund staff told why they should buy so many bitcoins
The business of one of Wall Street’s largest investment firms is doing better than ever before. Grayscale Investment increased management assets to $ 3.8 billion. According to Ray Sharif-Askari, Director of Investor Relations, Grayscale received $ 1.7 billion from financial institutions and hedge funds. At the same time, the company continues to purchase cryptocurrency – and on a massive scale.
This year, Grayscale is often remembered in the cryptocurrency community. The fact is that an investment fund is actively buying cryptocurrencies. In particular, at the end of April, sources spoke about the purchase of 48 percent of the volume of all ethers that were mined in 2020. That is, from January 1, Ethereum miners mined a certain amount of coins, and almost half of them went to the fund. Naturally, we are not talking specifically about these airs of “2020 release”, but about the volume of the purchase as a whole.
A month later, Grayscale was again mentioned in the news. It turned out that since the Bitcoin halving on May 11, stocks of the investment fund have replenished by 153 percent of the issued coins. It was about at least 18,910 bitcoins – today it is the equivalent of 182 million dollars. In general, the level of interest of the company in the cryptocurrency niche seems incredible. Therefore, the representatives of the community and the question arose about what it is associated with. It turned out that the whole thing was in the market conditions.
Why do investors buy cryptocurrencies?
As Ray Sharif-Askari noted, 2020 brought with it instability in the macroeconomics, increased dollar emissions and an additional incentive for large investors to look for alternative ways to save capital. Here is a quote in which she describes what is happening.
It was a record year and a record quarter for us. Frankly, we have never seen such a demand for our products.
That is, the employee made it clear that there is a huge demand on the market for alternative investment methods, which include cryptocurrencies. Amid the release of new dollars, people do not want to keep cash and try to invest it in something more reliable. And since Bitcoin managed to survive the peak of the coronavirus pandemic and return to previous heights, it can be considered as a good option for preserving capital. That is, retail investors are interested in cryptocurrencies, so the Grayscale fund buys them.
A relatively large part of the investment in Grayscale came from the owners of
In the end, our investors seek to access digital assets in a form that does not force them to buy and store [cryptocurrencies] on their own.
Recall that when investing in cryptocurrency trusts, companies need to buy a share in this trust. For example, in Grayscale Bitcoin Trust, the share is 1/1000 bitcoin. That is, by buying 1 GBTC, the investor receives an asset equivalent to 1 real bitcoin, which is stored by the investment company. Obviously, this is not the right way to store cryptocurrency, but for someone it is suitable. We are talking about investors who have heard about the advantages of Bitcoin, but are not familiar with it in detail.
Recall that back in May 2019, the volume of assets in the management of Grayscale reached $ 2.1 billion. In March 2020, the company owned assets worth $ 2.2 billion, in just a couple of months this number almost doubled. Another positive sign – the average weekly investment in Grayscale cryptocurrency trusts has grown from $ 3.2 million to $ 30 million in one year. That is, the company is doing well.
Grayscale is one of the largest providers of cryptocurrency investment products
Over the past year, owners of 401k plans have invested $ 390 million in Bitcoin, another $ 110 was invested in Ethereum through Grayscale cryptocurrency trusts. Sharif Askari added that Grayscale customers are increasingly diversifying into altcoins. 38 percent of investors hold coins other than Bitcoin, which is 9 percent more than last year.
In her opinion, one of the main reasons for the growing popularity of Grayscale products was the COVID-19 pandemic and the instability of the economy against its background. People began to intensively search for alternative assets for investments and their search led them to Bitcoin.
Judging by the comments of the representative of Grayscale, the current situation in the world contributes to the popularity of Bitcoin and other cryptocurrencies. A coin is often called a way to preserve capital during a crisis, and the beginning of 2020 proved it. At least now, BTC costs $ 9,627, although after a market fall in March, the rate fell to 4 thousand.