Grayscale Investments continue to have a record year.
Recently, we reported that the cryptocurrency asset management company consumed 50% more bitcoin than mined since the halving.
Since the third reward halving that cut down miner inflow from 1800 BTC per day to 900 BTC per day, Grayscale has been buying up bitcoin like crazy.
Since halving, Grayscale has gobbled up 28,413 BTC which is 48% more than the BTC produced in about a month.
Institutional interest surging
In another record week, the company has added 9,502 BTC to their Bitcoin Trust since last week compared to 6,863 BTC generated during the same period. The Form -8k submitted to the SEC on June 4th reads,
“Since the sales reported on the most recently filed Current Report on Form 8-K by Grayscale Bitcoin Trust (BTC) (the “Trust”), the Trust issued 9,884,700 Shares (…) or an aggregate of 9,502.84212328 Bitcoins representing $90,283,806.”
These shares were issued at varying prices to selected “accredited investors” and now there are 376,727,000 Shares issued and outstanding as of June 3, 2020.
Notably, these newly created shares are locked for a period of six months while the company charges a 2% annual fee.
Institutional interest in bitcoin is really picking up in 2020, with CME futures and options trading volume hitting new highs along with the open interest. In May, its total volume jumped 59% to $7.2 bln.
Through its Bitcoin Trust, Grayscale offers investors that primarily consists of hedge funds the exposure to the price movement of bitcoin. This traditional investment vehicle where each share of GBTC represents about 0.00096112 BTC, allows interested parties to invest without the challenges of buying and storing bitcoins.
Currently, bitcoin is trading at $9,700 while GBTC is trading at a premium of over 25% at $11.73.
Grayscale’s Bitcoin Trust currently has $3.5 billion assets under management while the total AUM is $4.0 billion, up from $3.2 billion a month back.
The asset manager reported Q1 2020 as the “strongest” quarter with record inflows while seeing demand at a “record pace.” The company seems to be on track to yet another record quarter, given its bitcoin purchases.
Grayscale also offers exposure to other cryptocurrencies including Ethereum (ETH), Ethereum Classic (ETC), Bitcoin Cash (BCH), XRP, Horizen, Litecoin (LTC), Stellar Lumens (XLM), and Zcash (ZEC) through its other products.
Grayscale’s Ethereum Trust (ETHE) is currently trading at a whopping 750% premium.