Grayscale Investments added 2,612 BTC to its assets under management (AUM) on Jan. 14. This follows purchases of 2,172 bitcoin the previous day.
In a Grayscale report, the firm stated that much of last year’s soaring demand came from institutional investors.
Grayscale Continues to Buy More Bitcoin than Mined
As BeInCrypto previously reported, Grayscale Investments was one of the largest buyers of cryptocurrencies during 2020. Purchases increased during Q4, with the company adding more than $3 billion in digital currencies to its AUM in a single week just before Christmas.
It now holds more than $25 billion worth of crypto. The higher cost of entry following the price rally of the last two months hasn’t put Grayscale off, though.
According to a Twitter account tracking the company’s bitcoin purchases, it added more than 4,700 BTC between Jan. 13-14.
.@Grayscale added another ~2612 #Bitcoin yesterday, which equals 2.9X of daily bitcoin mined. 🚀
— GBTC Bitcoin Tracker (@GbtcT) January 15, 2021
Interesting fact regarding GBTC’s investor profile for Y20:
Institutional: 87%
Accredited: 8%
Retirement Accounts: 2%
Family Offices: 3%
(Source: GS Q4 Report) pic.twitter.com/9A5sXjsow9
As highlighted above, Thursday’s 2,612 BTC purchase represents almost three times the total bitcoin awarded to miners over the same period. On average, miners receive a share of around 900 bitcoin per day.
The rising demand for bitcoin that Grayscale reported in 2020 has not waned in the new year. The firm’s Digital Asset Investment Report for Q4 2020 indicated that investors had poured around $5.7 billion into Grayscale Products last year.
At an average of $90 million a week, the Grayscale Bitcoin Trust (GBTC) represents the most popular Grayscale product. It accounts for the lion’s share of the $109.8 million average weekly investments across all of the firm’s products.
The report also notes that investment ramped up towards the end of the year. The final quarter saw a total of $3.3 billion invested across Grayscale’s family of products, with an average of $217.1 million finding its way into GBTC each week.
Grayscale notes that most of the demand is coming from institutional investors. The company reported that institutions accounted for 93% of investments made during Q4.
GBTC received 87% of the inflows to Grayscale products. This, according to the report, supports the notion that institutions have started looking at BTC as a reserve asset.
Grayscale Ditches XRP Trust
Although demand for bitcoin appears to be growing, the company announced on Thursday that it was dissolving its XRP Trust. The news follows an SEC lawsuit against Ripple Labs, claiming that XRP represents an unregistered security.
Several exchange platforms have announced the delisting of XRP entirely. Meanwhile, others have temporarily paused XRP support until a final court decision.
In justifying its decision to remove the XRP Trust, Grayscale reasoned that converting XRP to USD will likely become more difficult with limited offramps. Subsequently, it is dissolving the product and will distribute the net proceeds to shareholders.
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