World’s Largest Crypto Asset Manager Raises $360 Million In 2018 Bear Market, 66% From Institutions
World’s Largest Crypto Asset Manager Raises Almost $360 Million Last Year in Bear Market, With 66% From Institutions
Grayscale is a subsidiary of Digital Currency Group and has been named the world’s largest crypto asset manager. According to a new report, the company raised $30.1 million during the last three months of 2018, which was substantially smaller than the $95.4 million that it saw in the same time the year before. However, their successful start in 2018 and the impressive support from institutional investors give the company encouragement about their future.
As reported by The Block, managing director Michael Sonnenschein expressed that the lower numbers in the fourth quarter were not surprising, adding that the drop from $81.1 million in Q3 to $30.1 million in Q4 was due to “seasonal challenges.” Looking at the movement of Bitcoin as well, it is clear that the drop coincided with Bitcoin’s loss as well.
Still, it is hard to ignore the fact that their success in the last year is the most profitable success that they have seen in the five years that the company has been active. Approximately 66% of the investments ($237 million) came through institutional investors, which were primarily based within the United States. Retired men and women were also a major influence.
The report stated,
“We saw that retirement accounts comprised a higher percentage of total demand for Grayscale products in the fourth quarter (40%), while institutional investors continued to be the dominant source of inflows for 2018 (66%). While the dollar amounts invested declined in Q4, institutional investors share of the ‘new investment pie’ was roughly consistent throughout the year.”
Many experts, like Pathfinder Venture Capital’s Ari Paul and billionaire Mike Novogratz, have commented on the group mentality of institutional investors, waiting for others to commit to this asset class before ultimately diving in.
Sonnenshein told The Block,
“Bitcoin specifically is where the majority of inflows are going.” With increased interest in the Bitcoin Investment Fund that Grayscale hosts, he believes “that’s where investors have spent the most time, hence they’re most comfortable with that asset. Bitcoin’s perseverance that has helped it “overcome so much adversity” is another possibility.”
The parent company of Grayscale seems to have faith in Bitcoin over any other altcoin as well. CEO Barry Silbert was quoted yesterday in saying “Bitcoin is king.”
Now, with the progress, albeit low towards the end of 2018, Grayscale manages $825 million in assets, which fall under the aforementioned investment fund. However, it previously reached $1 billion, so only time will tell if it reaches such heights again.
Speaking on the way that the company handles assets that seem to be shrinking, Sonnenshein said,
“We are growing our team, and investing in tech and infrastructure.” He continued, “The main takeaway from these results is that people are not less interested in cryptocurrency. We saw clients already involved in digital assets continue to deploy capital.”
Posting to Twitter, Grayscale said,
“BREAKING: We are excited to share our 2018 Digital Asset Investment Report! 2018 Highlights include: Total Capital Raised into Grayscale Products: $359.5M Majority of investment (66%) came from institutional investors.”
To view the entire report, consumers can visit https://grayscale.co/q4-2018-digital-asset-investment-report/.