Digital currency manager, Grayscale, who lets accredited investors own Bitcoin and other coins via its funds, reported it took in $608 million in investments last year, surpassing the total amount raised the previous six years. Good news for crypto adoption?
The record-breaking results were mainly brought about by a brilliant last quarter of 2019, where Grayscale brought in about $225M in diverse investment products, undoubtedly hinting at a larger market trend.
According to Grayscale’s managing director, Michael Sonnenshein, the firm’s excellent year reflects a growing belief on the part of the hedge that BTC and other cryptocurrencies are here to stay.
“Investors are really glomming on to this notion that this is a bona fide asset class, and it’s not going away and that they can’t pay attention to it.”
The bulk of the investor influx amounting to around 71% of the entire fund, came from institutions like hedge funds. According to Grayscale, the 2019 performance has raised total investments to well over $1.17 billion.
Grayscale Investments Saw Surge in Investors Base
Grayscale concurrently saw its client-base growing by 25 percent in the last year, with new clients contributing around $146M of the total funds.
The report also mentions that Grayscale customers are progressively showing more interest in diverse products offered by the company.
However, of all its products, the Grayscale BTC Trust had the highest demand, with $193.8 million raised in Q4 and $471 million throughout the year.
Marissa Arnold, communications director at Grayscale Investments, remarked that the record-breaking numbers are indicative of broader market sentiment and institutional flows into cryptocurrency.
Grayscale holds a special position in the cryptocurrency space at a time when the SEC has continuously shut the door on BTC ETFs.
Although it does not offer a Bitcoin ETF, the digital currency manager sells stocks in a group of trusts that hold BTC and other top coins, a legal way that permits institutional investors to gain exposure to crypto markets.
Institutional Players To Stimulate Greater Interest in BTC
For Grayscale, surging investor influxes point to a generational shift in investing strategies, especially where young people consider digital assets such as BTC to be a safe-haven.
In addition to the products offered by Grayscale, a significant amount of other institutional gateways into the cryptocurrency markets have opened up throughout the past year.
Major institutional players within the financial markets, including TD Ameritrade, Fidelity, and NYSE parent company ICE, all are offering various BTC-related trading services.
It remains unclear as to what effect institutional involvement in the markets will have on BTC in the short term, but over a longer time frame, it is highly likely to garner more trust amongst investors.