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Grayscale Shows Strongest Demand For Crypto Products Since Inception

Martin Young | Oct 16, 2019 | 05:06

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Bitcoin and crypto markets may be down from their highs this year and still looking bearish, but longer term crypto investment products are still going strong as Grayscale can testify. The cryptocurrency investment firm has just posted its Q3 report and all is looking rosy.

Quarter Billion Inflows For Crypto Investments

Anyone that says institutions are not interested in crypto is barking up the wrong digital tree. Grayscale Investments’ Q3 report proves otherwise as over a quarter of a billion dollars has been injected into digital asset investment products. This works out at over ten percent of the entire crypto market capitalization.

The report highlighted that inflows have tripled quarter-over-quarter, from $84.8 to $254.9 million, despite recent declines in digital asset market prices. This marks the strongest demand for Grayscale products since firm inception. The average weekly investment for all crypto products was $19.6 million and 84% of that came from institutional investors dominated by hedge funds.

In 2019 the total investment into Grayscale crypto products has been $382.3 million, with a similar percentage coming from institutions. The third quarter has clearly seen the lion’s share of that capital inflow.

Bitcoin Trust Dominating

While bitcoin’s market share may have slipped, Grayscale’s BTC Trust certainly hasn’t. The bitcoin investment product took $171.7 million in the third quarter with the report adding;

In 3Q19, we saw the heaviest quarterly inflows to Grayscale Bitcoin Trust in the product’s six-year history, including nearly $75 million in a single day.

July inflows were also at a monthly high and December 2017 was also bullish. Both months saw BTC rise to peak price levels.

The firm’s Ethereum and Ethereum Classic trusts have been no slouches either with over $100 million flowing into the products so far this year. Grayscale’s ETH trust has taken over $77 million this year with inflows every week of the third quarter.

The firm also has trusts for a handful of other altcoins such as Litecoin and XRP, but these have under-performed along with the assets themselves. The main focus of investment has been bitcoin and Ethereum which continue to attract institutional interest despite another market downturn.

Day traders and short term profit seekers are driving daily market action and they are generally in sell mode at the moment. Those looking at longer term gains and growth in the industry in general are clearly institutional types who desire a decent slice of crypto in their portfolios.

Bitcoin and crypto markets are likely to dump further as those day traders start to panic, but a lot is now locked up in longer term investments so the outlook for the future is still bullish.

Will institutional investments turn markets around? Add your comments below.

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