Institutions Still Bullish On Crypto: Grayscale Owns 1% of All Bitcoin

As Bitcoin continues its chaotic price action, ceaselessly falling and ascending through key levels, some paranoid traders have feared that institutional investors have been alienated from the crypto market. Yet, reports indicate that Grayscale’s growing war chest has continued to swell, while institutional players continue to express interest in crypto assets. This, of course, makes it more than palpable that institutions see immense value in cryptocurrencies, and potentially, that a market bottom is inbound.
Grayscale Owns $826 Million in Bitcoin
According to a research report released on December 3rd, from the offices of crypto analytics unit Diar, Grayscale Investments, a self-proclaimed “trusted authority on digital currency investing,” has accumulated thousands of BTC for its in-house Bitcoin Investment Trust (GBTC).
Since the start of 2018, Grayscale, owned by Barry Silbert brainchild Digital Currency Group (DCG), has seen its Bitcoin coffers swell by 30,600 BTC to 203,000 total, now accounting for more than 1% of the asset’s total circulating supply. 
As seen in the chart above (sourced from LongHash), the wallets pertaining to Grayscale’s GBTC, a vehicle that allows retail and investors to purchase custodied BTC on the U.S. OTC market, has seen month-over-month increases. Diar wrote on the matter:
“Record inflows however have resulted in record Bitcoin equivalent holdings with December notching up a little versus the start of the previous month.”
Although GBTC’s user base also consists of retail investors, the steady rise in BTC holdings indicates that capital continues to flow into this market through trusted third parties (ironically enough), a plausible positive sign.
Institutional Players Continue Crypto Foray
Grayscale isn’t the only DCG subsidiary to see a spike in investment interest. Genesis Trading, also owned by the New York-headquartered conglomerate, recently saw its CEO, Michael Moro, take to CNBC to note that his firm’s lending service has seen an “incredibly strong reception.”  This “incredibly strong reception” has seemingly taken the form of interest originating from “60+ institutional counterparties,” who have requested for cryptocurrency loans across “nearly a dozen digital assets” in the past six months. According to statistics from the firm itself, these loans amounted to a monetary value of $553 million, a jaw-dropping sum to put it lightly.
Moro added that while many of its institutional debtors have already paid their loans in full, there is still $130 million worth of active loans,  a figure that has only grown of the course of the lending service’s seven-month lifetime. This indicates that the crypto market downturn hasn’t deterred these industry participants one bit, contrary to popular belief.
This continual institutional interest hasn’t gone fully unnoticed, with a number of institutions and forward-thinking crypto innovators establishing products, services, and platforms, aimed at high net-worth individuals and Wall Street. Nasdaq, for instance, recently announced that it joined hands with VanEck to work on a Bitcoin and “crypto 2.0” futures contract, aimed at institutional and retail investors alike.
Related Reading: Why Are Novogratz, Fidelity, And Bakkt Banking On Institutional Crypto Investors?
Fidelity Investments, which sports the business of 13,000 institutional clients, even announced its own digital asset-centric subsidiary, slated to offer top-notch cryptocurrency custody and with trade execution.
Even Without Institutional Investment, Crypto Still Valuable
But even if institutional money doesn’t continue to flood in and the aforementioned platforms falter, as skeptics expect, Bitcoin and its altcoin brethren will still have big shoes to fill. As reported by NewsBTC last week, at BlockShow Asia 2018, Tom Lee, head of research at the crypto-friendly Fundstrat Global Advisors, claimed that Bitcoin is “bent, not broken.” The long-time cryptocurrency advocate, somewhat infamous for his irrational price predictions, added that Bitcoin’s $1.3 trillion in on-chain transaction value, reportedly 2.5 times that of PayPal, indicates that this innovation has “staying power.”
He added that there’s still “enviable profitability” in the cryptosphere, with BitMEX alone, who will likely generate $1.2 billion in fiscal 2018, making more than the Hong Kong Stock Exchange’s parent and Nasdaq. This profitability factor alone should entice investors to continue to invest in cryptocurrencies and related projects.
Jackson Palmer, CEO of Dogecoin, echoed the sentiment that cryptocurrencies have and will continue to maintain inherent value, even without support from Wall Street hotshots. In an op-ed posted to Diar, Palmer, a developer at Adobe, noted that the grassroots projects, namely the Lightning Network and Plasma framework, can help “cryptocurrencies fight back” and keep the heart of the decentralized revolution burning.
Related Reading: Dogecoin Creator: Bakkt, Fidelity, and Bitcoin ETF Are Bad for Cryptocurrency
Palmer wasn’t alone in his anti-centralization, pro-crypto statements, with Ethereum co-founder Vitalik Buterin, Marc Andreessen, one of the world’s foremost venture capitalists, and even Edward Snowden lauding cryptocurrencies for their ability to transcend traditional entities.
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Grayscale Makes Multi-Million Dollar Bet on Cryptocurrency ZEN

Grayscale Investments is making a $6.3 million investment in the cryptocurrency ZEN. The investment will be through a new fund whose entire focus is on Horizen, a small and relatively unknown platform that hosts a cryptocurrency, called ZEN.
Grayscale Investments is best known in the cryptocurrency community for their Bitcoin Investment Trust (GBTC), which enables retail investors to gain exposure to Bitcoin through their traditional brokerage accounts, without having to deal with any of the issues and complexities involved in buying physical Bitcoin from a cryptocurrency exchange.
What is Horizen and ZEN?
ZEN is a privacy focused cryptocurrency underneath the Horizen project, and it hosts several unique features, including censorship-resistant publishing, a platform to build privacy applications on, and the generation of universal basic income through personal data ownership.
Grayscale invested in the Horizen project by purchasing ZEN, which is essentially the Horizen project’s cryptocurrency. Horizen came about after the ZEN team conducted a rebranding of sorts, in which they expanded what was originally called the ZenCash platform in order to focus more on its privacy features and other features. Horizen became the general name to refer to the project, while ZEN became the cryptocurrency of the project.
Grayscale’s ZEN Investment Comes After 51% Network Attack 
ZenCash was originally founded in 2017 and rebranded to Horizen this summer.
The rebranding came about after ZenCash was the victim of a 51% attack in June, in which hackers essentially took control of the majority of the network’s nodes, enabling them to falsify transactions and to steal ZEN.
Horizen’s co-founder, Rob Viglione, claimed that the Horizen team quickly contained the hack, and has since updated the network’s security in order to prevent this type of attack from occurring in the future. The attack, however, already generated a significant amount of negative press, which was likely the impetus for the rebranding.
Grayscale is now investing $6.3 million in the Horizen project, proving that the investment group believes that the platform has sufficiently fixed the network’s flaws and is developing a unique enough product to compete with its competitors, including the popular cryptocurrency, Zcash.
While speaking about the multi-million-dollar investment, Grayscale’s managing director, Michael Sonnenshein, said:
“We’ve been very impressed with the Horizen team and its vision for ZEN as a leading privacy coin. Grayscale is at the forefront of asset management in this emerging industry, and we will continue to offer our clients access to the most interesting blockchain projects in the world.”
Horizen’s co-founder and president also spoke about Grayscale’s investment, saying:
“The launch of the ZEN Investment Trust on Grayscale’s platform marks a significant milestone in the continued global expansion of the Horizen platform and the services we offer. Grayscale conducts unparalleled research and due diligence on their investment products, striving to offer regulated and professionally managed exposure to the digital currency market for institutional and accredited investors worldwide.”
Horizen (ZEN) was trading up nearly 5% at the time of writing, trading at $18.49 according to CoinMarketCap.
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Crypto Week In Review: Sentiment Starts To Shift As Bitcoin Moves Up 15%

Sentiment regarding the cryptocurrency market took a large shift this past week, as Bitcoin rallied 15% due to a series of positive technical and fundamental indicators.

IBM To Use Stellar-Based Stablecoin For Faster Financial Payments

IBM, one of the largest technology firms in the world, has just announced that it will be exploring the utilization of a Stellar-based token for cross-border payments.  The token in question was created by asset management firm Stronghold and was fittingly named Stronghold USD, which is a stablecoin that is pegged to the value of the U.S. dollar.

Unlike other stablecoin projects like Tether, prospective Stronghold USD users will make a deposit to the Nevada-based Prime Trust bank, with Stronghold issuing tokens on a 1:1 ratio. Additionally, this project was created with institutions in mind, rather than consumers, making the aforementioned stablecoin a much better choice for IBM in comparison with something like Tether or TrueUSD.

Tammy Camp, the founder and CEO of Stronghold, explained the use cases of the token more in-depth, stating:

“The token allows folks to do payments, foreign exchange between companies in a very seamless and frictionless and more secure way. It enables people to be able to trade that token with other assets and other tokens as well.”

Despite The Bear Market, Greyscale Investments Sees An Influx of Institutional Capital

Grayscale Investments, a digital asset focused investment firm, recently revealed that it had received an influx of institutional investment and interest, despite market woes.

Grayscale, which is headed by cryptocurrency expert and long-time investor Barry Silbert, released a report that cited that it had received just around $250 million from investors, looking to invest into Greyscale’s array of investment products. Although this is an impressive figure by itself, Silbert noted that 56% of the aforementioned figure was generated from institutional investors, potentially noting that these firms see a good entry point at current prices.

Bithumb To Expand Into New Asian Markets

Bithumb, a popular Korean exchange, has announced that it has plans to expand into the Japanese and Thai markets within the upcoming months. The exchange is currently working on obtaining the required regulatory approval from the local governments, namely the Japanese Financial Services Agency and the Thai Securities and Exchange Commission.

The Thai Bithumb branch is the furthest in development, with its parent company creating a webpage for the platform, along with allocating 3 million Thai Baht (~$90,000 U.S.) to the newly-opened subsidiary.

It is expected for Bithumb Thai to launch by the end of October, while Bithumb Japan is expected to open its doors early next year, despite harsh regulation imposed by regulators. The exchange will not be any ordinary platform, with ZDNet Korea noting that Bithumb “plans to set up an exchange that supports the largest number of coins (cryptocurrencies) in Japan.”

Tom Lee And Barry Silbert Call For Bitcoin To Continue Upwards

CNBC’s “Fast Money” show hosted industry leaders Tom Lee and Barry Silbert this week, with the two stating that they hold positive sentiment regarding Bitcoin’s price.

Barry Silbert, who is a long-time cryptocurrency investor and the aforementioned founder of Grayscale Investments, expects an influx of institutional “dry powder,” or highly liquid assets, in the near future. Silbert also stated that the bears have “run out of energy,” and have no more Bitcoin to sell, therefore resulting in less selling pressure placed upon prices.

The Bitcoin proponent later pointed out that the criticisms placed upon the industry by regulatory bodies don’t hold any value, and come unwarranted. He said:

“So I started buying Bitcoin in 2012 when the price was ten dollars and I’ve gone through now two 80 percent corrections, and this was a 65 percent correction. It’s the same old criticisms… Its just (that) they’re uninformed because everybody on this desk, anyone who spends the time to look into what is this asset class, why is it important, why does it have so much potential comes out of it being a believer.”

Tom Lee, the head of research at market analysis firm Fundstrat, also pointed out that fundamentals and technical indicators are starting to turn bullish once again, expecting for the world’s foremost cryptocurrency to head upwards from here.

Crypto Experts Hold Bullish Price Predictions

Arthur Hayes, the co-founder and CEO of the BitMEX exchange, tripled-down on his $50,000 price prediction, while also making an appearance on the CNBC show that seems to cover cryptocurrencies each and every day. Despite stating that he believes the market hasn’t “seen the worst” yet, expecting for Bitcoin to bottom at $5,000, he is betting that the cryptocurrency market will return to a bullish state as we move into the second half of the year.

Hayes noted:

“I don’t actually think we’ve seen the worst. I would like to see us test $5,000 to really see if we put a bottom in. But come back in Q3, Q4, I think is when the party is going to start again.”

Bitcoin Holds Weekly Gains, As Altcoins Slightly Pullback 

On Tuesday, Bitcoin saw an astonishing run-up, easily surpassing the heavily contested resistance levels at $6,800 and $7,000. Altcoins quickly followed, with a majority of the cryptocurrency market posting ~8-9% gains on that day alone. Many attributed this run-up to a series of positive news that was released prior to the run-up, namely discussion regarding institutional involvement, with this variety of investment being held as the primary catalyst for the expected bull-run of 2018.

Additionally, as Tom Lee stated on CNBC, the technical indicators were starting to become more favorable as discerned by a variety of analysts.

Since then, many altcoins experienced a slight pullback, with Bitcoin’s market dominance rising from 43% to 45%. Bitcoin has continued to hold the gains it made earlier this week, with the cryptocurrency sitting at around $7,450.

It has become apparent that the sentiment surrounding the cryptocurrency market is starting to change, with an onslaught of positive news coming from all corners of the industry. Arthur Hayes put it best when he said:

“But come back in Q3, Q4, I think that is when the party is going to start again.”

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Huge Inflow into Crypto Investment Fund Despite Bear Market

Crypto investment fund Grayscale has revealed it received record-breaking inflows of money during the first six months of 2018 even though the price of Bitcoin crashed from $20,000 to $7,000.

Crypto Fund Receives Strong Backing

Grayscale Investments released their first Digital Asset Investment report, which showed a large influx of money into their crypto investment funds. From January to June, they amassed $248.4 million in new assets, which will add to their $2 billion portfolio. This is the highest amount of money they have received in any six-month period.

“As the investment community knows, over the last six months, the digital asset market experienced one of the largest price drawdowns since the inception of Bitcoin in 2009,” said Grayscale in the report. “However, what is more interesting, and somewhat counterintuitive, is that the pace of investment into Grayscale products has accelerated to a level that we have not seen before.”

During this time, they added new funds including support for Bitcoin Cash, Ether, Litecoin, and Ripple in March. They now have eight investment funds available including a Digital Large Cap Fund.

Grayscale Investments is a subsidiary of Barry Silbert’s Digital Currency Group, founded in 2013. The Group manages Genesis Trading which is a full-service, institutional trading firm aimed at digital currencies. It also manages a crypto news site, which provides market updates.

“Bitcoin has the potential to radically transform our concepts of money, store of value, and the means by which assets are exchanged the world over,” said B

In June, Grayscale launched their Zencash Investment Trust focused on the Zencash (ZEN). Similar to Zcash, which Grayscale already offers, it is available to accredited investors for the first year and then will be available to the general public.

Strong Demand from Institutional Investors

More than half of the investment came from institutional investors, according to the report. This shows a clear sign of the interest in the market and sharply contrasts Blackrock CEO Larry Fink who said that he hadn’t heard of one client who was interested in cryptocurrencies.

Fink said: “No. I don’t think that any client has sought out crypto exposure… I’ve not heard from one client who says, ‘I need to be in this.’”

Other signs of a move towards institutional investors include the largest ETF trader in Europe moving into crypto alongside a new proposal for a Bitcoin ETF in the U.S., which has attracted a large number of comments by those in the crypto community. The U.S. Securities and Exchange Commission (SEC) has also clarified its position on securities and said that Ethereum and Bitcoin are not securities, even though Ethereum was funded by an ICO.

On the back of this, Coinbase has continued to move into the smart money market with its custody offering although it had to backtrack after previously claiming that the SEC had approved it to list security tokens.

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