Grayscale Trusts Suffer $3.3 Billion Downturn Following Market Rout

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In Brief
  • Grayscale Trusts lost $3.3 billion between Feb. 22 and Feb. 25.

  • Loss representative of market downturn over the past few week.

  • Grayscale surpassed $30 billion AUM for the first time earlier this month.

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The total net assets under management (AUM) of crypto investment firm Grayscale fell back to $38.7 billion on Feb. 24.

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In its asset update from Feb. 22, Grayscale had tweeted that its AUM amounted to $42 billion. This makes up a $3.3 billion downturn in trust value in less than a week — nearly an 8% loss.

Grayscale Hit Hard

The value of Grayscale’s largest trust, the Grayscale Bitcoin Trust, fell from $35.2 billion to $32.5 billion, a drop of almost 8%.

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Grayscale’s Ethereum Trust dropped from $5.58 billion to $5.14 billion, a loss of around $440 million. After the damage had been done, the firm’s Ethereum Classic Trust was the biggest loser. It saw its holdings per share drop nearly 20%, and its market price per share fall over 25% on Feb. 22.

Bloody Monday

Grayscale’s current losses are representative of many crypto investments over the past few days. According to data from Bybt, $5.64 billion in crypto across 645,278 positions on exchanges were liquidated between Feb. 22 and Feb. 23. The event has come to be known as ‘Bloody Monday.’

Some $2.41 billion worth of BTC was liquidated along with $1.35 billion worth of Ethereum (ETH) as well as nearly $200 million of Litecoin (LTC) and Ripple (XRP) each. Other crypto-assets such as Binance Coin (BNB), Bitcoin Cash (BCH), EOS, Polkadot (DOT), and Cardano (ADA) added up to a total of $663 million in liquidated positions.

Grayscaling Up

Despite these losses, Grayscale is unlikely to be deterred. Recently, it has aggressively picked up almost any crypto assets it could get its hands on. Even since the beginning of the year it has made several prominent acquisitions.

In January, Grayscale accumulated 150% more BTC than was mined across the entire network. On Feb. 4, it bought 12,684 ETH, adding nearly $40 billion to its portfolio, which put its AUM over $30 billion for the first time. It also began dabbling in DeFi, filing trusts for  Aave and Polkadot in January, as well as Yearn, and SushiSwap in February.

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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