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Bitcoin Institutional Demand Up as Grayscale Breaks Record

The institutional demand for Bitcoin (BTC) is mounting amid the coronavirus crisis. And this is with Grayscale, a multi-billion dollar BTC and crypto-asset manager, revealing its biggest-ever quarterly inflows of nearly $1 billion.

In addition to that, Bitcoin demand stays as strong as ever as the BTC price treads water. Also, its inflows into the Grayscale Bitcoin Trust – Grayscale’s biggest and flagship fund – outpaces the creation of new BTC since the May supply squeeze.

New York-based Grayscale lets accredited investors purchase Bitcoin and other major cryptocurrencies via its funds. It then reported inflows of $905.8 million for its second quarter. It almost doubled the last quarterly high of $503.7 million in the first three months of 2020.

The institutional investors, mainly hedge funds, accounted for around 84% of Grayscale Bitcoin and cryptocurrency fund investment in the second quarter of the year. This is up from 81% for the trailing 12 months.

New investors, meanwhile, represented 57% of the Grayscale investor base during the quarter. And this increased from 49%. However, they only accounted for $124.1 million of the inflow into Grayscale digital asset products.

Still, Bitcoin remained the most remarkable asset from Grayscale. It accounts for 83% of the investment. However, Grayscale mentioned a deep interest in alternative cryptocurrencies. There was demand for its Ethereum Trust accounting for almost 15% of overall inflows, recording an all-time quarterly high.


BTC Price

Bitcoin’s Price has been lingering around $9,000 since it went through its fourth supply cut, called halving. But Grayscale expects the high demand for BTC fund to be a possible positive sign.

In Wednesday’s quarterly report, Grayscale noted, “With so much inflow to Grayscale Bitcoin Trust relative to newly-mined bitcoin, there is a significant reduction in supply-side pressure.”

Grayscale added that this might be a definite hint of BTC price appreciation.

Grayscale’s managing director, Michael Sonnenshein, immediately pointed out that those investing in Grayscale’s Bitcoin fund are not directly holding BTC.

He also noted that comparing the rate of demand growth for a Bitcoin access product like Grayscale Bitcoin Trust to the rate of newly mined BTC is just to describe supply and demand in the market.

“The comparison does not provide insight into the destination of any mined Bitcoin during the measured period,” Sonnenshein wrote in an email.

Also, Philip Bonello, Grayscale’s research director, mentioned during its second-quarter report that Grayscale is not making the demand. This reflects the demand for the asset class.


Jones Lost BTC

Elsewhere, a Brazilian JiuJitsu fighter based in Australia, Craig Jones, announced that he became one of those unlucky people who missed out on the Bitcoin all-time high in 2017 after misplacing his coins.

On the CoinJar blog post on July 16, the 29-year-old former International Brazilian Jiu-Jitsu Federation World No-Gi Champion and two-time Abu Dhabi Combat Club Trials champion bought Bitcoin in 2015 when the price was at about $200 to $400. But Jones couldn’t cash in when the price topped $20,000 in December 2017.

He stated that none of his mates remembered the password. None of them could remember how to get to their account back either.

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