Grayscale, the largest digital asset manager, offers cryptocurrency based investment trusts for Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. The company added an additional $3 billion in digital assets to its total AUM (assets under management).
According to Jan Uytenhout, one of the co-founders of Capriole Investments, Grayscale has been busy. It added 12,000 new Bitcoin in one day to its Bitcoin Trust. This amount of Bitcoin cost almost $280 million according to current Bitcoin prices. It is 13 times higher than the amount of new Bitcoin mined in the day.
Grayscale buying continues at all time highs
Grayscale is a digital asset manager. It holds crypto on behalf of its investors, allowing them to gain exposure to the price fluctuation of the cryptocurrency. Most retail users would advocate for personally owning and controlling any cryptocurrency purchased. However, there are not many options for regulated investments into the cryptocurrency market.
Grayscale solves this with its variety of cryptocurrency trusts. The company is amassing extremely large quantities of Bitcoin, Ethereum and other cryptocurrencies. Its Grayscale Bitcoin Trust currently retains over $14 billion and its Grayscale Ether Trust amassed almost $2 billion.
Bitcoin recently beat its all time high prices after gaining over 300% in price this year. Despite this, many high net worth individuals are still investing into Bitcoin. MicroStrategy recently purchased $650 million worth of Bitcoin at prices exceeding $21,000 per Bitcoin. MicroStrategy CEO Michael Saylor stated that the company’s average buy price still hovers around $15,000 per Bitcoin. However, the firm’s willingness to raise debt to invest in Bitcoin shows it believes Bitcoin’s price will keep rising. MicroStrategy isn’t the only major corporation backing Bitcoin. PayPal, Mass Mutual, Square, and others are investing in or integrating blockchain technology into its organization.
Bitcoin as a hedge against inflation
2020 is quickly coming to an end. It it will be a year that the world will remember for a long time. But the issues that arose with it will still be here. The spread of a global pandemic and increased worldwide economic uncertainty attracted many to Bitcoin’s potential as a safe haven. America alone, with multiple stimulus bills, drove many towards an asset that in their eyes, could provide some stability.
As Michael Saylor recently tweeted, “Whenever someone questions our Bitcoin strategy, I always wonder what advice the critic would give to the 44 million people in Argentina”. Saylor followed this with a graph comparing the Bitcoin price to Argentina’s peso.