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Grayscale Investments: 56% of New Bitcoin and Crypto Capital Is Coming From Institutional Investors

July 18, 2018

New York-based investment firm Grayscale Investments released a new report detailing capital distribution among its core products. It shows that in the first half of 2018, 56% of investments are coming from institutional investors with deep pockets.

Grayscale is the sponsor of several cryptocurrency investment trusts, including the Bitcoin Investment Trust, Bitcoin Cash Investment Trust, Ethereum Investment Trust, Ethereum Classic Investment Trust, Litecoin Investment Trust, XRP Investment Trust and Zcash Investment Trust, and the manager of Grayscale Digital Large Cap Fund.

The total investment into Grayscale products since January, 2018 stands at $248.39 million.

Despite the long Bitcoin bear market that has marked all of 2018, Grayscale saw an average weekly investment of $9.55 million across all products. The Bitcoin Investment Trust attracted an average weekly investment of $6.04 million. Assets raised for the Bitcoin Investment Trust represent 63% of total investments compared to 37% for Grayscale products tied to other digital assets.

Inflows into Grayscale products are happening at a consistent rate with the average weekly investment in altcoin or “non-Bitcoin” investment products totaling $3.62 million.

The report indicates that institutional investors are no longer hesitating to invest in cryptocurrencies.

The numbers belie recent statements from BlackRock CEO Larry Fink, a well-known Bitcoin critic, who denied recent reports suggesting the asset management firm, which has $6.3 trillion under management, is investigating cryptocurrencies in order to meet a perceived demand from its institutional clients.

In an interview with Bloomberg on Monday, Fink said, “I don’t believe any client has sought out crypto exposure.” To be clear, he added, “I’ve not heard from one client who says, ‘I need to be in this.’”

The Grayscale report shows that after institutional investors, the firm’s largest group of investors are accredited individuals (20%), retirement accounts (16%) and family offices (8%).

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