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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Institutional Interest in Crypto During Bearish Times is Bullish

An oversold market makes the best time to enter. And experts believe it is happening with crypto industry as it retains a yearly bearish bias.
The significant dip seen in 2018, followed by consecutive strong rebounds from a specific bottom area has upped medium-term bullish sentiments in the crypto market. Bitcoin, the cryptocurrency with the highest dominance, for instance, has reversed its downtrend on multiple occasions upon testing a $250-wide area below $6,000 as strong support. The price action has led bulls to conclude that it would be impractical for bears to crash Bitcoin below the $6,000-range, citing miners’ breakeven ROI, and the influx of institutional funds around the oversold bottom.
Big Names Entering Crypto Space
The growing number of crypto hedge fund launches this year has testified that there is a demand for crypto gateways among institutional investors. Significant monies have entered the $211 billion space by spreading some portion of their investment portfolio to digital currencies like Bitcoin, Ripple, EOS, and Ethereum.
The endowments of several high-profile institutions, including Harvard University, MIT, Stanford University, Yale University, Dartmouth College, and the University of North Carolina have spread their risks into at least one cryptocurrency fund.

Commentators often seem surprised when companies make moves, invest, or launch products during crypto bear markets. They then act confused when bull markets return. "Where did this come from?" they ask. Perhaps this is why they are commentators, rather than business people.
— Erik Voorhees (@ErikVoorhees) October 16, 2018

Other investors are entering the space with over-the-counter markets or so. Michael Novogratz, a one-time hedge fund billionaire, converted 30-percent of his wealth to crypto assets and announced a $500 million crypto-fund. Dan Morehead of Pantera Capital-fame invested in 43 cryptocurrency-related startups and is currently one of the largest institutional owners of digital assets. The list is too long.
Garry Tan, a prominent seed investor, stated that investors believe that Bitcoin is bottoming out and noted a “buying-the-dip” sentiment among prominent investors, majorly citing David Swensen, Yale’s Warren Buffet, who recently invested an undisclosed sum into two crypto-funds.

Super confused at the fud about institutional investors coming into crypto funds.
Is it a big deal? Yes.
Is it a negligible amount? No. It’s as much as a given endowment might put into a core venture capital investment. That’s the kind of return they expect.
— Garry BUIDL Tan (@garrytan) October 7, 2018

 
Strong Fundamentals
There is also a significant amount of money waiting at the door on speculation that the US Securities and Exchange Commission will give the green light to some Bitcoin ETFs by mid-2019. More so, if the SEC appoints a new legal definition to crypto-assets, then institutional investors in the US could be assured of receiving watchdog protections, no different than forex and gold futures.
Prominent industry leaders are already meeting lawmakers and regulators to come up with a concrete crypto law that could decide the fate of the industry in the US. Once Bitcoin is regulated as a security or any other asset, then institutional money will tail the high-net individuals and hedge funds already in the space. It could result in a strong rally, coupled with factors that investors will be buying Bitcoin low against the projected values ranging between $14,000 to even a million dollars.
 
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Coinbase Want To Attract More Than Just Institutional Investment

Coinbase have been accused of only wanting to attract institutional investors, however their latest move is one that has been designed entirely for low level and inexperienced investors. Coinbase Bundle is a new platform that is being launched by the popular US exchange in order to make it easier for new investors to invest in cryptocurrency.
Coinbase Bundle will be launched in the United States and across Europe over the next few weeks and will allow new traders to purchase a bundle of five cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ethereum Classic (all of the tokens that are currently offered on the Coinbase exchange).
Continue reading Coinbase Want To Attract More Than Just Institutional Investment at Crypto Daily™.
Source: Crypto Daily

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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