Barry Silbert’s Grayscale Investments has released an income report which defies the theory that lower Bitcoin prices mean less cash flowing into cryptocurrency.
Who Cares About Bitcoin Prices?
In its Digital Asset Investment Report, Grayscale revealed the highest rate of investment in its history — $250 million since January.
The rate of investment, especially in Bitcoin, actively increased throughout Q1 and Q2 — despite Bitcoin prices decreasing by over 50 percent during the same period. “As the investment community knows, over the last six months, the digital asset market experienced one of the largest price drawdowns since the inception of Bitcoin in 2009,” the report summarizes, continuing:
However, what is more interesting, and somewhat counterintuitive, is that the pace of investment into Grayscale products has accelerated to a level that we have not seen before […] Bitcoin continues to be the most popular position for Grayscale investors, with 63% of inflows into Bitcoin Investment Trust and 37% into Grayscale products tied to other digital assets
Tweeting about the news, Silbert said he was “thrilled” by Grayscale’s performance, the vast majority of investments being for the group’s Bitcoin Investment Trust.
https://twitter.com/barrysilbert/status/1019554853083926528
Not All Funds Are Created Equal
Prior to announcing the results, Grayscale had remained unflinchingly bullish on cryptocurrency markets.
In an analysis earlier this month, researchers determined crypto assets to be the “missing piece of the puzzle” for investors looking to maximize the effectiveness of their strategy. “Moreover, many digital assets are imperfectly correlated to one another, which means there may even be diversification benefits within the asset class itself,” they found.
Grayscale also bucks a trend of cryptocurrency-focused funds beginning to struggle with changing market conditions.
A report in April warned that by 2019, up to 10 percent of funds will have closed as regulatory uncertainty weighs on growth. “New capital has slowed, even for a higher-profile fund like ours,” one fund told Bloomberg at the time, marking a stark contrast with Grayscale.
What do you think about Grayscale’s investment record? Let us know in the comments below!
Images courtesy of Twitter.