Grayscale’s Assets Under Management Reaches $25B

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In Brief
  • Grayscale’s Assets Under Management (AUM) touched a high of $25 billion on Jan. 12.

  • AUM has gone up by roughly $23 billion in under a year.

  • Institutional interest is increasing, possibly indicating more growth in 2021.

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Grayscale Investments has crossed $25 billion in assets under management, going up by nearly 13x since Q1 2020.

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Digital asset management firm Grayscale Investments tweeted on Jan. 12 that it had reached $25 billion in assets under management (AUM). The company has also resumed offering its products to new investors after suspending inflows last month.

Yet Another Grayscale Milestone

The milestone comes as interest in the cryptocurrency market widens, despite the sell-off that occurred on Monday. Bitcoin’s current price of $33,000 is a significant return for Grayscale, which had been accumulating since before the halving.

In Jan. 2020 alone, Grayscale has increased its AUM by $10 billion. The firm’s holdings are primarily composed of Bitcoin and Ethereum, at $21 billion and $3.1 billion, respectively.

But there may be room yet for more short-term growth as altcoins tentatively recover from Monday’s drop. The company bought over 12,000 BTC in a single day in Dec., as the market continued to pick up steam.

For comparison, in Q1 2020, Grayscale only had $2.2 billion AUM. In under a year, it has risen roughly 13x to its current figure. While the market is likely to experience a few corrections, the point remains that Grayscale appears to have made some very profitable calls.

Its holdings could see more growth due to BTC and ETH’s fundamentals, which show strong network activity. This could, in turn, draw in more professional investors, which a recent Bitwise Survey suggests could happen.

Institutional Interest Remains Strong as Analysts Target Six-Figure Prices

The market inflows this time have a distinct institutional flavor, contrasted with the mostly retail-led purchases of 2017/2018. These firms are largely eyeing bitcoin because of volatility and regulation-related concerns.

Goldman Sachs’ Jeff Curries believes that the market is maturing, which he says is expected for a nascent asset. Analysts seem to think the same, with several suggesting six-figure targets for bitcoin in 2021.

This includes JPMorgan Chase, which said that $146,000 was possible but “unsustainable.” Binance US CEO Catherine Coley believes that bitcoin could reach the $75,000 to $100,000 price range.

Institutional investment will play a large part in the increased demand for the alpha cryptocurrency. As increased regulatory clarity appears for stablecoins and much else arrives this year, will the market continue to see heightened gains?

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Rahul is an India-based Digital Marketer who became attracted to Bitcoin and blockchain technology in 2014. Ever since, he's been an active member of the community. Other than that, he is a die-hard gamer. This gadget freak is well renowned in his circle for binge-watching Game of Thrones.

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