Grayscale Recording Inflows “Unlike Ever Before;” Meanwhile World’s Largest Gold ETF Yet to See Any
Bitcoin is enjoying a wild rally, having surged more than 20% since yesterday this too, while average BTC fees being just above $4.
Trading above $23,000 with $11.27 billion in ‘real’ volume, the market is euphoric with greens.
Bitcoin’s market cap has reached above $430 billion today, adding more than $70 billion since yesterday.
This is all the result of the factors at play in this bull market that we haven’t ever seen before in terms of “investment banks writing research highlighting bitcoin superiority to gold,” said Michael Sonnenshein, Managing Director of the largest crypto asset manager Grayscale Investments.
We also saw prominent investors like Paul Tudor Jones, Stanley Druckenmiller, BlackRock CIO, and many others coming out supporting this asset class and corporations like Square and MicroStrategy adding bitcoin to their balance sheet as a reserve asset.
China’s central TV channel covering #Bitcoin’s new all-time-high: The impact of Covid-19 and the surge in safe-haven demand from the global monetary policy of “flooding the money supply” are the key drivers of Bitcoin's recent surge. pic.twitter.com/PVlLrHyvVy
— cnLedger (@cnLedger) December 17, 2020
As Sonnenshein shared in his interview with CNBC, Grayscale is currently seeing flows that “are now probably up 6x what they were last year.”
Elaborating on the type of investors that are buying GBTC at over 34% premium to Bitcoin price and ETHE at nearly 210% premium to Ether, Sonnenshein said these “investors that are putting capital to work are unlike any of the investors we're seeing ever before.” He said,
“It's some of the world's largest investors and the allocations that they're making are bigger than we've ever seen before and their time horizon for this is generally something over the medium to longer-term.”
As of writing, GBTC holds just above 569k BTC, worth more than $12 billion, representing just over 3% of Bitcoins’ circulating supply, while their Ether stash represents 2.58% supply at 2.94 million ETH worth $1.84 billion.
Unlike all the flows that Bitcoin sees currently, gold has yet to recover from all the outflows it started recording last month. Kevin Rooke noted,
“The world’s largest gold ETF sold 8.3% of its gold so far in Q4 (100+ tons), and hasn't seen any inflows in 17 trading days. November 19th was the last day the NAV of GLD actually went up, almost a month ago.”
However, the price of gold did manage to uptrend some on the back of declining USD, and Federal Reserve Chairman Jerome Powell vowing that they will keep up with its massive monetary stimulus.
Climbing to $1,890, the bullion still recorded 22.32% returns in 2020 compared to Bitcoin’s 223%.