Increased institutional demand for Bitcoin, Ethereum, and crypto-products as Grayscale improves their game

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The cryptocurrency market has piqued the curiosity of many investors, and another wave of large-scale adoption may be on the horizon. However, this could be attributed to more than only cryptocurrency price volatility, but also to authorities’ forthcoming judgement on numerous crypto products, including exchange-traded funds [ETFs]. The increasing volume of inflows into the space is a telltale sign that consumers are turning to crypto to secure financial risks.

According to CoinShare’s Digital Asset Fund Flows Weekly report, nearly 40% of the past week’s inflows to digital asset investment products were allocated to instruments tracking altcoins. Whereas, $97.8 million was invested into crypto investment products between 30th August to 3rd September. Out of these inflows, $38.9 million was invested in altcoin products.

Meanwhile, the survey indicated that institutional asset managers currently represented a total AUM of $62.5 billion, close to the record-level of $66 billion observed in mid-May. Grayscale has dominated the space, accounting for 73% of the sector’s AUM.

Growing its product line with multiple altcoins seems to match with the company’s expansion ambitions before the US Securities and Exchange Commission authorises the first ETF. Grayscale Investments is also the world’s largest digital asset manager, with almost $50 billion in assets under management (AUM).  However, as the asset manager awaits approval from the United States Securities and Exchange Commission [SEC], it recently announced three of its single asset products have become SEC reporting companies. Grayscale Bitcoin Cash Trust [BCHG], Grayscale Ethereum Classic Trust [ETCG], and Grayscale Litecoin Trust [LTCN] were among them.

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These assets join Grayscale’s Bitcoin [GBTC], Ethereum [ETHE], and Digital Large Cap Fund [GDLC] trusts in reporting to regulators, providing regular financial statements and disclosures, and complying with all other SEC ACT of 1934 requirements. That is, all six offerings will now be restricted to publicly traded corporations on national exchanges like Nasdaq or the New York Stock Exchange.

This was due to increased investor interest in not only Bitcoin but also other crypto assets, as highlighted in CoinShare’s research. The SEC reporting firms, according to Michaell Sonnenshein, CEO of Grayscale, have “opened Grayscale to a wider audience of investors who are normally used to seeing that [kind of information] when they think about making investments.”

With institutional interest growing by the day, asset management businesses such as Grayscale may seize the opportunity to capitalise on this demand by offering a wider choice of crypto products.


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