If there was any doubt about institutional investment getting into Bitcoin, the latest data from Grayscale Investment quashes any doubt.
The institutional investment firm has reportedly purchased more than 1.5 times the amount of bitcoins mined since the Bitcoin halvening earlier this month.
Purchased for its Bitcoin Trust (GBTC), it emphasizes the growing institutional demand for the leading cryptocurrency.
Grayscale Bitcoin Trust Acquires 1.5 Times Amount of BTC Since Halvening
Grayscale has stepped up its BTC purchasing since the third halvening. In a released report, GBTC is believed to have acquired over 18910 BTC since the halvening.
In that same period, there were only 12,337 BTC minted, meaning Grayscale had acquired 1.5 times the amount of bitcoins.
The purchasing by Grayscale has really ramped up, because if we compare data for the 100 day period before the halvening, the institutional investor bought up about a third of the bitcoins.
The news led analyst Kevin Rooke to assert, ‘Grayscale’s Bitcoin Trust is on a whole new level in 2020 … Institutional money has arrived.’
As we can see from the tweet, it’s a huge jump from earlier figures. The average weekly buy in for Q1 2020 is $29.9m, compared with just $3.2m in the same period for 2019.
In response to his tweet, Grayscale CEO Barry Silbert hinted: ‘Just wait until you see Q2.’
Grayscale revealed back in April that the capital inflow in Q1 alone was 83% of the capital raised in the whole of 2019.
What’s more, 88% of all the capital inflows from Q1 were from institutional investors, mainly hedge funds, and in that period, both the Bitcoin and the Ethereum Trust saw record capital inflows.
Savvy Investors Looking To Hedge From Inflation
The crash in March, however severe, was a typical reaction during a rush for liquidity. Even the traditional store of value, gold, took a short term hit, but gold has bounced back, and so has Bitcoin in spectacular fashion.
Analysts have predicted rising institutional demand for Bitcoin after the global economy recovers from the health crisis.
And we have seen several billionaires come out and recommend Bitcoin, as a way to hedge against inevitable inflation that’s in the horizon.
And with legendary macro investors, such as Raoul Pal of Real Vision, repeatedly tweeting about the bullish scenario for Bitcoin. ‘The perfect set up. Bitcoin porn,’ he called it.
In one thread, Pal said, ‘This is the one of the best set ups [BTC macro chart] in any asset class I’ve ever witnessed…technical, fundamental, flow of funds and plumbing. All. Now.’
Not Everyone Agrees
Although, according the Goldman Sachs official narrative, Bitcoin isn’t a recommendation. The antique told its clients that cryptocurrencies ‘are not an asset class.’
Obviously Grayscale and its institutional investors aren’t listening to the financial passé.
2018 was supposed to be ‘the year of the institution’ but look how wrong the narrative was. It was too early. We were in the capitulation phase, and many who bought in early 2018 fell for the narrative.
Billionaires, highly respected macro traders, and proof from Grayscale’s data are all saying the same thing. Goldman doesn’t agree with them, but why do they think their opinion is trusted anyway?
Well, whatever the narrative (they’re usually wrong), it’s better to watch what institutions do, not listen to what they say, especially antiquated banks who have been comfortable for far too long.
Author: Tommy Limpitlaw