Grayscale Fund: Institutional interest is not diminished, 84% of the capital inflows in the third quarter of this year came from non-encrypted hedge funds

According to foreign media recently, Michael Sonnenshein of the Grayscale cryptocurrency investment fund argues that the Form 10 application submitted by the asset management company to US regulators will be a “milestone” for the encryption industry if approved.


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Sonnenshein, managing director of Grayscale Investments, the world's largest digital asset management company, made the remarks in an interview with CNBC on November 20.

Want to get a digital asset exposure hedge fund

Earlier this week, Grayscale filed a filing statement with the US Securities and Exchange Commission (SEC) for its publicly traded Bitcoin (BTC) fund, Grayscale Bitcoin Trust (GBTC) Form 10.

If approved, the trust fund will become the first cryptocurrency investment vehicle for the US Securities and Exchange Commission (SEC) to obtain a reporting company status. In an interview with CNBC, Sonnenshein pointed out the agency's strong interest in cryptocurrency access products. Even in the third quarter of 2019, he said:

“84% of the inflow of funds comes from unencrypted hedge funds that want digital asset exposures.”

GBTC has been trading since May 2015, and Sonnenshein stated:

"No matter how bitcoin performs in the spot market, just look at the volume of transactions in the past three months, which is a two-fold increase over the same period last year."

Regarding the importance of the SEC's possible green light for Grayscale's Form 10 application, Sonnenshein said:

“There are a lot of companies that want to get in touch with this area, but then they start asking, who in the company will hold the key? Who will conduct due diligence and ongoing compliance?”

In addition to the benefits of compliance, he also emphasized the importance of creating a range of products that “appear and feel like many of the other tools used by these organizations.”

Halving, not the institution, will drive the price of Bitcoin

The point, he said, is that if we think that Form 10 will produce fruitful results, we will see for the first time that “there is a need for an SEC reporting company to invest in institutions with greater access” and “faster liquidity options, so investing Those can reduce their holdings after six months (rather than twelve months)."

Regarding any potential impact on bitcoin prices, Sonnenshein gave up the arguments adopted by institutional investors, but instead emphasized the halving of Bitcoin's upcoming (and consequent reduction in supply), a factor that has historically indicated It has a positive impact on asset prices.

According to reports, Grayscale is now in a record year, with a total investment of $254 million in its products in the third quarter of 2019.