US investment firm Grayscale has submitted a quarterly report to the Securities and Exchange Commission (SEC) that outlines the growth of its Bitcoin holdings by $1.6bln.
The Trust increased its Bitcoin holdings from 261,192 BTC in December 2019 to 386,723 BTC by June 31 this year. The fair value of the current Bitcoin holdings is valued at $3.5 bln, which shows that the value of its holdings increased by nearly 100 percent in half a year.
It’s an impressive milestone for the cryptocurrency investment firm, which has been driven by some major investments over the past six months as well.
Best quarter on record
As reported by Coindesk midway through July 2020, Grayscale enjoyed back-to-back, record-breaking quarterly earnings with over $1.4bln in investments pouring into the company’s accounts.
Over $900 mln was raised in the second quarter of 2020 alone, which substantially passed the first quarter capital inflow of $500mln. According to Grayscale, nearly 85 percent of the capital raised in the first half of 2020 has been from institutional investors looking for exposure to cryptocurrencies.
While investors have primarily looked to invest in Bitcoin holdings, the Grayscale Trust has also seen an uptick in the amount of investors looking to gain exposure to alternative cryptocurrencies.
In the second quarter of 2020, the Grayscale Ethereum Trust accounted for nearly 15 percent of capital inflows into the company’s accounts, valued at around $135mln. Grayscale has also filed for the Ethereum Trust to become an SEC reporting company.
Grayscale also provided an interesting insight, highlighting the fact that the Bitcoin Trust had accumulated more Bitcoin than had been mined by the Bitcoin ecosystem since the latest BTC mining reward halving.
A fortuitous 2020
One need look no further than the numbers to understand that it’s been a fantastic year for the Grayscale Bitcoin Trust. What makes this even more impressive is the fact that the Grayscale Bitcoin Trust only became an SEC reporting company in January 2020.
The company became the first over-the-counter, publicly traded Bitcoin investment vehicle in 2015 but there were certain barriers that prevented institutional investors from getting involved.
That changed some 8 months ago when the Grayscale Bitcoin Trust was officially registered with the SEC. This allowed investors that were barred from investing in non-regulated vehicles to finally gain exposure to various cryptocurrencies through the company.
One of the conditions of being an SEC reporting company is that a company must publicly file quarterly and annual reports with the regulatory body. This will afford transparency when it comes to the holdings and performance of the Trust.
Institutional money eyes crypto
The Grayscale Bitcoin Trust is not the only fund that is actively accumulating Bitcoin and other cryptocurrencies.
As The Daily Chain reported earlier this week, Business Intelligence firm MicroStrategy bought $250mln worth of Bitcoin, amounting to an estimated 21000 BTC, as part of the company’s latest capital allocation strategy following its financial results for the second quarter of 2020.
Instead of holding surplus funds in fiat currency or conventional investment assets, MicroStrategy has opted to invest in and hold Bitcoin, citing the preeminent cryptocurrency’s dependability as a store of value and long-term potential of appreciation over fiat currency.