Grayscale Investments has increased its assets under management (AUM) in its Bitcoin Trust (GBTC) by more than $180 million.
The institutional fund management firm added 17,100 Bitcoin (BTC) to the Bitcoin Trust in the last week.
Added to the Trust’s AUM, Grayscale now has a total of 449,900 Bitcoins at an aggregate price of $4.9 billion parked in its fund.
Grayscale’s Bitcoin allocation means it hodls about 2.4% of the total Bitcoin supply, which is currently at 18,502,725, making it the biggest active Bitcoin whale.
The Bitcoin Trust, which has grown almost 40% from $3.55 billion on 1 July, shows no sign of slowing down either.
What Is The Grayscale Bitcoin Trust (GBTC)?
The Grayscale Bitcoin Trust (GBTC) is a Bitcoin investment product that individual investors can buy and sell in their own brokerage accounts.
Although it is not a Bitcoin ETF, it’s the closest we have to one. It’s modelled on popular commodity investment products like the SPDR Gold Trust ETF, and it gives investors access to buy and sell public shares of the Trust.
It was launched back in 2013, and has grown into an almost $5 billion asset. Its price mirrors that of Bitcoin because its value is derived solely from Bitcoin.
The trust requires a minimum investment of $50,000 and charges an annual fee of 2% and is solely for accredited investors.
Grayscale’s Growth Has Been Phenomenal
Grayscale Bitcoin Trust (GBTC) is an almost $5 billion asset and most of that growth has been this year.
The average weekly investment with Grayscale Bitcoin Trust averaged $3.2 in 2019, and in January 2020 the average weekly investment rocketed almost x10 to $29.9m a week. And since then, the average weekly investment has touched almost $70m.
Institutional Money Is Pouring Into Bitcoin
Grayscale might be a gateway into Bitcoin for big hedge funds and other institutional investors, but Michael Saylor thought it better to buy Bitcoin itself with $425 million of public firm, MicroStrategy’s treasury.
Saylor shocked everyone with his bold move, when he secured 38,250 Bitcoins for MicroStrategy.
MicroStrategy is a relatively small corporation, but the surprising thing about it is that it’s 97% institutionally owned, by the likes of Wall Street behemoths BlackRock, Vanguard and JPMorgan.
Saylor said in an interview that he took his plan to buy Bitcoin to the board, and offered a premium on the $MSTR stock for any investor who didn’t want to be a part of it. Few took him up on the offer of a buy out.
BlackRock has $7.43 trillion assets under management (AUM), Vanguard has $6.2 trillion, and JPMorgan $2.39 trillion AUM, and they were all involved in sanctioning the purchase to make Bitcoin the principal holding in MicroStrategy’s treasury reserve.
So, for Wall Street giants like these to be so bold in agreeing to invest almost half a billion dollars into buying Bitcoin has taken even the most bullish of Bitcoiners by surprise.
Grayscale First, Then MicroStrategy, Who Next?
The outlook for Bitcoin is so bullish. With government monetary policy only getting more ridiculous, it’s hard to see how more institutions won’t look towards Bitcoin as a store of value.
Grayscale GBTC is now almost $5 billion, and it isn’t slowing down. MicroStrategy has just made Bitcoin the talk of every single boardroom from New York to Mumbai.
Many believe Apple or the big tech stocks will be next to buy Bitcoin, and they should by rights see the value in disruptive software tech, but they can’t move as fast as smaller corporations.
So, it’s likely to be companies similar in size to MicroStrategy. Either way the next 12 to 18 months are going to be very interesting indeed.
Author: Pablo Clarke