Holds 225,000 BTCs! Grayscale’s institutional interest in scale is declining

According to Grayscale's "Second Quarter Digital Asset Investment Report for 2019" released on July 16, the company managed more than $2.7 billion in cryptocurrency assets as of July 15, 2019. Therefore, this figure marks the fact that the assets managed by the company have nearly tripled since the last quarter.

Grayscale's overall performance in the second quarter

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• Analyst: In the short term, the rising space of cryptocurrencies such as BTC, ETH and BNB may be limited.

Grayscale said in the report that the company's total investment in single assets and diversified investment products in the second quarter of 2019 was $84.8 million, almost double the previous quarter. The company noted that new investment in the cryptocurrency sector is one of the main drivers of the recent surge in cryptocurrency prices.

Among investors, institutional investors accounted for the highest proportion of Grayscale's total product demand, reaching 84% since July 2018. There has also been a significant increase in competition for coin investments, with capital inflows accounting for 24% of total capital inflows in the second quarter, compared to 1% in the first quarter.

70% of the investment is for investors to convert the tokens they already hold into shares in Grayscale products. Overall, on the surface, the second quarter marked the first positive quarterly performance of all 10 Grayscale investment vehicles.

As previously reported, as of July 9, Grayscale's Bitcoin Trust (GBTC) grew nearly 300% year-on-year. Compared with the mainstream investment reflected in the S&P 500 index (18.7%) and the global Dow Jones index (12.9%), the trust fund's yield so far this year is 296%, an astonishing increase.

However, as of the end of June, Grayscale held 225,316 bitcoins, slightly less than 1.3% of the total circulating supply of Bitcoin. Bitcoin inflows (the number of bitcoins held by GBTC) are hitting lows, indicating a decline in institutional interest. The GBTC premium is currently around 30% and has begun to decline, indicating a shift in market sentiment.

Also this month, Grayscale reinstated the private placement of the GBTC shares and now regularly provides daily subscriptions to qualified investors (under Section 501(a) of the Securities Act). (Babbit)

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