Grayscale, the largest institutional asset manager in crypto, is now holding about 277,000 Bitcoin (BTC) worth $2.866 billion.
The firm offers crypto exposure through its Bitcoin-backed flagship product, the Grayscale Bitcoin Trust (GBTC). It also offers altcoin trusts, including Ethereum, XRP, Bitcoin Cash, Litecoin, Stellar, Zcash, Ethereum Classic and Horizen.
The company has released a new overview of its assets under management. It shows that Ethereum and Ethereum Classic are the second and third most popular cryptocurrencies among investors.
The Grayscale Bitcoin Trust exploded in popularity in 2019 when the firm says the total investment across all of its products that year hit $607.7 million. That figure is higher than all cumulative investments from 2013 to 2018.
The company says institutional investors with deep pockets are fueling much of its growth.
- 71% of 2019 investment came from institutional investors
- Client base expanded by 24%, with existing clients accounting for more than 75% of capital raised
- 36% of Grayscale clients now have allocations to multiple products within the Grayscale product suite
At the recent Crypto Finance Conference in Switzerland, Grayscale managing director Michael Sonnenshein said institutional money in the world of crypto has arrived, and Bitcoin is already eating into gold’s market share.
“I think one of the areas that’s already underway is taking share of the gold market – or Bitcoin or other digital assets emerging as this digital store of value. Perhaps gold and other things may have been that type of investment that had a place in a portfolio when the world was much more physical. For better or for worse – I would argue for better – the world has gone quite digital. And so, it’s time to start thinking about what constitutes a digital store of value, and so we start looking at things like Bitcoin.”
Moving forward, Sonnenshein believes Millennials and younger generations will also play a key role in the adoption of crypto assets.
“I think the analogue that’s not being discussed as much, which we find to be exceedingly important, is in the United States, over the 25 years, we’re looking at about $68 trillion that’s going to pass down from older generations, baby boomers, down to Millennials and younger generations.
So we’re certainly not going to go out and say that we think $68 trillion is moving into digital currency. What we do think, however, is investors today need to be positioning their portfolios and looking at skating towards where the puck is going.
Younger generations do not necessarily have the same investing preferences and the same kind of investments don’t necessarily resonate with them. And so if you are raised in the time of Apple and Venmo and Bitcoin, the ability to pay your friends digitally, buy a flight with airline miles, whatever it may be, we most certainly think that digital currency is going to be a recipient of some of that value as money is transferred from one generation to the next.”
In December, Charles Schwab released a report showing the Grayscale Bitcoin Trust is the fifth most popular equity among its millennial investors, ahead of Disney and Netflix.