Grayscale’s Record-Breaking Hat-trick, Q3 Inflows Rakes in Over $1 Billion in Investment
Q3 was the best quarter ever for Grayscale Investments, which serves institutional investors, family officers, and private investors.
The largest digital asset manager took in more than $1 billion in new investment in its largest-ever quarterly inflows, marking it the third-straight quarter when the asset manager broke its own record for inflows.
As per the firm's report on Wednesday, Grayscale now has $5.9 billion in assets under management (AUM).
This growth came despite the global economy taking a nosedive in 2020, and the price of Bitcoin recording gains of only 18%.
Like every time, the leading digital asset remained the most popular cryptocurrency. Grayscale Bitcoin Trust (GBTC), the company's largest product, saw $719.3 million in new inflows in Q3.
The persistent demand for GBTC has the company becoming one of the fastest-growing investment products in the world. It is further increasing the appetite for Grayscale’s other products.
Ethereum saw a record growth with 17% of the investment in Grayscale Ethereum Trust (ETH) from new institutional investors.
This week, Grayscale announced that ETHE is now an SEC reporting company that helped in its price surge.
“We believe in a future where multiple digital assets coexist,” said Michael Sonnenshein, managing director at Grayscale Investments. “We believe that there is a future state where bitcoin, Ethereum, and other digital currencies coexist as part of the digital currency cohort” and are “used for different things,” he said.
Grayscale’s Bitcoin Cash, Litecoin, and Digital Large Cap products also saw over 10x growth in inflows quarter-over-quarter.
Interestingly, for the first time, Grayscale found that a majority of its investors, more than half at 57%, were investing at least two of its crypto investment products, up from 44% a year ago and 37% when the company was first launched in 2012.
More institutions are surely coming, which are not only the primary source of investment capital at 81% in Grayscale, but they also increased their average allocation to $2.9 million from the previous quarter’s $2.2 million.
What is more interesting than this “consistent and significant growth” is what has been behind it.
Besides the digital assets outperforming major indices YTD, investors are interested in them because of the ongoing stimulus concern. With more significant fiscal stimulus expected in Q4, “more investors may look to digital assets for yield in this paradigm of monetary inflation,” it says.