Grayscale’s newly named CEO, Michael Sonnenshein, said Thursday to Bloomberg that mutual funds and endowments are currently invested in the Grayscale fund family.
“We’ve started to see participation not just from the hedge fund segment, which we’ve long seen participation from, but now it’s recently from other institutions, pensions and endowments. […] The sizes of allocations they are making are growing rapidly as well.”
Grayscale has been at the forefront of the acquisition of Bitcoin (BTC) and now owns nearly 3% of the BTC in circulation. The investment manager continues to acquire strong positions in the crypto currency as more institutional investors demand exposure to Bitcoin.
Its total funds under administration, or AUM, have been overshadowed by $27 billion in 10 related items. The Grayscale Bitcoin Confidence remains by far its most successful offering, with more than $23 billion in AUM. Grayscale’s Ethereum trust is currently estimated at about $3.6 billion, while the Digital Big Cap Investment retains around $339 million.
01/07/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) January 7, 2021
Pension funds are joining a collection of retail investors that started to enter the Bitcoin market in 2020. A survey commissioned last year by Fidelity Investments showed that 36% of financial institutions in the United States and Europe say they own cryptocurrencies or derivatives. About one quarter of the respondents reported owning Bitcoin, while 11 percent said they held Ether (ETH).
According to Grayscale Portfolios, the institutional flow to cryptocurrencies and bitcoin is intensifying, with pension funds and endowments among the most recent room entrants.
Grayscale’s aggressive acquisition of BTC is expected to lead to the accelerated price growth of the digital currency. With more bitcoin out of circulation, the still scarce currency gets much more difficult to get around. Sonnenshein explained the following:
“This is a verifiable scarce asset and so when there are mechanisms that are removing them from circulation, that’s inherently making it an even scarcer asset.”
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