Grayscale reports record-breaking quarter with $1 billion inflows

Demand for Bitcoin continues to soar with institutional investors pumping in record-breaking investment into crypto asset manager Grayscale.

By · Jul 17, 2020 . 4min read

Photo by Chris Liverani on Unsplash

NewYork based crypto asset manager Grayscale has reported that it has received inflows of nearly $1 billion during the last quarter. This is double what it received in the previous quarter, which itself was a record-breaking figure.

The demand for Bitcoin and other crypto-assets has been soaring in 2020. This is due to the economic uncertainty being caused by COVID-19. Digital assets tend to do well during times of economic instability.

It has maintained its demand despite going through its fourth supple cut in May. Grayscale sees this as a positive.

Institutional investors, such as hedge funds accounted for 84% of the net inflow. New investors made up 57% of the investor base for this quarter. Both figures are up from the last quarter. The new investors, however, accounted for only $124 million of the total investment.

Source: Grayscale

Bitcoin has been Grayscale’s most popular product, accounting for 83% of the investment.

A grayscale researcher commented on how Grayscale itself is not creating any demand for Bitcoin. Grayscale is merely reflecting the existing demand.

Some have criticised Grayscale’s reporting. Ray Watkins, a Bitcoin researcher at crypto analytics firm Messri tweeted that, “Grayscale buys way less Bitcoin than many would think”. He has accused Grayscale of purchasing only 31% of the new Bitcoin created, far less than the 150% + being reported by many.

Grayscale Managing Director Michael Sonnenshien says that Bitcoin is like a gateway drug for many of his investors. The capital inflow for many of Grayscales altcoin trusts is up 650% from last year. 81% of returning institutional investors have diversified into multiple crypto products.

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