New data shows institutional investors are buying Bitcoin (BTC) at a remarkable rate.
Market researcher Kevin Rooke is tracking the Grayscale Bitcoin Trust (GBTC), which gives institutional investors a secure way to gain exposure to BTC without having to buy the underlying asset itself.
GBTC is fully backed by real Bitcoin, and according to Rooke, the pace at which Grayscale is buying BTC now outstrips the new supply of the leading cryptocurrency.
“Grayscale’s Bitcoin Trust bought 18,910 Bitcoins since the halving. Only 12,337 Bitcoins have been mined since the halving.”
Referening a new report from Goldman Sachs that concludes Bitcoin is not an asset class nor a viable investment, Rooke comments,
“Wall Street wants Bitcoin, and they don’t care what Goldman Sachs has to say.”
The firm’s consumer management and investment division cites the cryptocurrency’s volatility as a key reason investors should avoid BTC, despite the fact that Bitcoin’s returns over the last decade far outpaced every other asset class by a wide margin.
Goldman’s analysis sparked a deluge of criticism from crypto leaders and investors who called aspects of the report hypocritical, out of context and out of date.
According to Grayscale’s Q1 report for 2020, 88% of all investments in the firm’s crypto offerings are coming from institutional investors, dominated by hedge funds.
“Grayscale raised $503.7 million in 1Q20, nearly double the previous quarterly high of $254.8 million in 3Q19. New investors accounted for $160.1 million in inflows. Grayscale Bitcoin Trust and Grayscale Ethereum Trust both experienced record quarterly inflows of $388.9 million and $110.0 million, respectively.”