As a global gathering place for old money and hot money, any change in Wall Street's attitude towards cryptocurrencies will have a huge impact on the market. At present, such a wave of transformation is being led by Grayscale Investment (hereinafter referred to as grayscale).
With more than 280,000 bitcoin management volume, Grayscale has become Wall Street's largest Bitcoin Trust (GBTC) management institution. The four-year 80 million USD management fee income has also made waiters salivate.
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Digital Currency Group Big Brothers
So, in the context of the spread of the global epidemic, the Dow Jones Index leaked 1,000 points, the biggest single-day drop in two years, and the uncertainty of the global capital market, how can grayscale build its own cryptocurrency investment "kingdom"? What kind of ambition does grayscale have in the cryptocurrency space? Will Wall Street Capital throw an olive branch into cryptocurrencies as a result?
1 Gray under DC G 麾
Grayscale, a subsidiary of Digital Currency Group (DCG) established in 2013, provides investors with a compliant investment channel in the form of a trust fund. At present, the total amount of cryptocurrency management scale (AUM) has reached 2.7 billion U.S. dollars. And more than 90% of the funds come from institutional investors and retirement funds. It is already the world's largest digital asset management institution.
As a gray-scale “upper peak unit”, DCG is a diversified group that integrates holding and investment. Its main investment area is the cryptocurrency market. According to the official data of the DC G official website, DCG has invested in more than 150 blockchain companies in more than 30 countries around the world, including many well-known large companies in the currency circle.
For example, Coindesk, Coinbase, Blockstream, Zcash, Circle, BitGo, etc. are all part of the DC G investment landscape. In addition, Genesis, a large digital currency institution market maker, is also a branch of DC G.
Grayscale currently holds a "list" of Bitcoin, (Source: Grayscale Investment)
Therefore, gray investment does not exist alone, but a section of the DC G crypto financial empire, and this section is now shining.
According to the latest grayscale report, the Fund's Bitcoin Trust (GBTC) currently manages 285,000 bitcoins, about 2.7 billion U.S. dollars, accounting for 1.57% of all Bitcoins, a record high. In addition, there are many well-known cryptocurrencies such as ETH, ETC, BCH, LTC, XRP, ZCASH.
Each cryptocurrency will correspond to a trust, or many cryptocurrency combinations will correspond to a trust. For example, Bitcoin Trust, Ethereum Trust, Litecoin Trust, Bitcoin Cash Trust, Ripple Trust, Zcash Trust, etc. only correspond to one cryptocurrency, and the Digital Large Cap is a portfolio of multiple cryptocurrencies.
In addition, gray-scale cryptocurrency holdings are also rising rapidly.
According to a report from Grayscale Investment in June 2019, the value of Bitcoin held by Grayscale at that time was 2.5562 billion U.S. dollars, which is equivalent to 231,000 Bitcoins at the time of the Bitcoin price, compared with 288,000 Bitcoins today. Bitcoin holdings have increased by 24.5%.
"It was still 230,000 at the end of June, and increased by more than 50,000 in eight months. I bought more than 5,000 a month." A Weibo blogger was surprised when he saw such a growth rate. But this may be the choice and speed of Wall Street, isn't it?
In fact, the gray bitcoin buying method will not be announced, but a recent survey report by Reddit users revealed these "secrets".
The report states that at the end of 2019, the Grayscale Bitcoin Trust (GBTC) purchased approximately 26,000 Bitcoins and locked them in for a year. The article also argues that this means two things: first, 26,000 bitcoins will not be launched soon. Second, there may be more bitcoin purchased by institutions through other investment funds, and these funds may also be locked to prevent premature selling.
In other words, the gray investment period is basically one year. At the same time, the gray-scale Bitcoin Trust transaction volume data is also very dazzling. According to the latest data, GBTC is the second-largest trading stock on the major OTC trading platform in the US capital market, second only to Tencent B shares.
Of course, grayscale investors have also benefited from these investment funds. According to Grayscale's annual investment report, the grayscale Bitcoin Trust's return in 2019 is as high as 87.7%.
Grayscale itself also made a lot of money from these funds. According to the gray management regulations, a management fee of 2% of the fund's assets is charged every year. In the past four years, gray has collected more than 80 million US dollars from GBTC.
It can be seen that the gray investment under DC G not only sat on the top spot in the crypto investment field of Wall Street, but also made a lot of money.
However, grayscale ambitions are much more than $ 80 million over four years.
2 grayscale ambitions
On January 21 this year, Grayscale officially released a blog saying that Grayscale's Grayscale Bitcoin Trust has become the first digital investment tool to obtain SEC reporting company status. Note: Only Bitcoin Trust is currently successfully registered as an SEC reporting company.
It is understood that after the gray-scale registration of the Bitcoin Trust, in addition to complying with the obligations under the Transaction Law, the subject matter of the transaction also asked the SEC. At the same time, these submitted reports will be shared with the companies listed on the National Stock Exchange and the Trading products follow the same standards.
"This move will make grayscale Bitcoin Trusts more secure and compliant."
He Bin is a practitioner in the traditional financial field. When asked about the significance of the gray bitcoin trust's successful registration with the SEC reporting company, He Bin commented, "In this way, the SEC can directly supervise and record gray bit With currency products, investors will be able to invest more confidently. "
"Although Grayscale stated in its Weibo that the trust cannot be confused with the Bitcoin ETF, after the successful registration, this product actually has certain attributes of the Bitcoin ETF." He Bin told OKEx Intelligence.
Of course, the "ambition" of grayscale may not stop there, and even think that Bitcoin can compete with gold .
"First of all, Bitcoin is now a safe haven and a means of storing value. When the market is chaotic, investors can really think about the role gold and bonds played in the past." Michael Sonnenshein is gray Managing Director of Degree, in an interview recently, gave his opinion on the meaning of Bitcoin representatives.
Michael also believes:
"It's quite optimistic about Bitcoin's status as a digital asset."
From this perspective, grayscale's ambitions for bitcoin assets are far more than 80 million in 4 years. They are thinking about the equal status of bitcoin and gold.
To this end, grayscale also gives professional research reports.
In a study conducted by Grayscale Corporation in 2019, the Bitcoin market benefited the most when the mainstream financial industry was facing an economic crisis. For example, during the Brexit fears from June 2016 to December 2016, Bitcoin prices rose by 7.1%. The euro and pound fell 2.4% and 8.1% respectively during the same period. At the same time, the Morgan Stanley Capital International Global Price Index fell 4.9%.
Concerns over Brexit have shaken sentiment in global markets other than Bitcoin. (Source: Grayscale Investment)
Grayscale concluded in the report: "Although bitcoin is still in its very early stages as an investable asset, we have found evidence that bitcoin can be used in a global liquidity crisis, especially those that lead to subsequent currency Evidence that acts as a hedging tool in a crisis of devaluation. "
Of course, there has always been fierce discussions in the market as to whether Bitcoin can be as safe-haven as gold.
Especially when the recent global stock market crashed and gold skyrocketed, bitcoin did not show the same trend as gold, but went out of the decline channel, and the price fell from a maximum of $ 10,500 to the current $ 9,500, a drop of nearly 10% .
In this regard, He Bin believes:
"Investors and analysts have been discussing Bitcoin's status as a potential safe-haven asset, but the sell-off early this morning seems to make this concept seem ineffective. As an emerging market, BTC is still unsure whether it is actually a safe-haven Assets, and whether they have any association with assets such as gold or stocks. "
In the future, the discussion about bitcoin and gold will continue. Who will win this debate? We will wait and see. However, this will not stop Wall Street from entering the market.
3 Olive Street on Wall Street
In fact, Wall Street has long thrown its olive branch to the cryptocurrency market.
In December 2017, the Chicago Mercantile Exchange officially launched bitcoin futures products. The price of bitcoin futures products that expired in January 2018 was as high as $ 20,650. Although the price of bitcoin has since fallen from a peak of $ 20,000 to about $ 3,000. But the market generally sees this as one of Wall Street's big moves.
Since then, around the cryptocurrency, Wall Street financial institutions launched the Bakkt Bitcoin Futures Exchange in June 2019, which is endorsed by well-known institutions such as the Boston Consulting Group, Intercontinental Exchange, and Microsoft Investment. In February 2019, JPMorgan Chase also launched the MJ coin stablecoin architecture.
The Chunjiang Plumbing Duck Prophet, in addition to these investment giants, individual investors on Wall Street are also optimistic about the cryptocurrency field.
In July 2019, the head of electronic trading at a large U.S. bank said: "Although large banks remain vigilant in public, traders will gladly accept the opportunity to trade cryptocurrencies with a total market value of $ 336 billion if given the opportunity . "
Forex market veteran and founder of cryptocurrency trading company Alpha Strano (Jan Strømme) said that as interest in institutional traders heats up, young programmers and quantitative traders have switched from banks to companies focused on cryptocurrency .
Graham Rodford, founder and CEO of cryptocurrency trading platform Archax, started trading Bitcoin as a sideline in 2012, when he was officially working at London-based hedge fund Omni Partners Acting as compliance officer. A former head of operations at HSBC, he concluded that in the future hedge funds will be financed through platforms like Archax and will trade digitally all asset classes, including stocks and bonds.
Among the many Wall Street elites who are optimistic about the future of cryptocurrencies, Tim Draper is particularly worth mentioning.
As we all know, Tim Draper is a senior cryptocurrency investor and a founding partner of Wall Street's DFJ Investment Fund, which manages about $ 2 billion in assets.
In a recent interview, when asked by CNBC reporters, "How many assets in your hands are cryptocurrencies, is one third or more?" Tim responded, "There are many, many." At the same time, Tim also predicted that Bitcoin will rise to $ 250,000 in the next two years.
Of course, whether it is grayscale, Wall Street's many capital giants, or individual investors, funding cryptocurrencies or investing in blockchain industry infrastructure, it has become a small-scale consensus.