Institutions are Pouring $57.8M into Bitcoin Each Week, New Report Reveals
Bitcoin’s price has been stagnant for the past few months, but this hasn’t stopped institutions from pouring money into the benchmark digital asset.
According to a new report from Grayscale, the company has been seeing massive institutional inflows into its BTC Trust, averaging at $43.8 million per week throughout the first half of 2020.
Surprisingly, most of these inflows came about in the second quarter, despite Bitcoin posting more notable gains in the first few months of 2020.
This indicates that global money printing and loose economic policies are driving investors towards alternative investments like BTC.
Institutional Involvement Within the Crypto Market is Growing
Legendary macro investor Paul Tudor Jones made headlines earlier this year when he announced that he is delegating a noteworthy percentage of his net worth into Bitcoin, explaining that he believes it will be the greatest beneficiary from ongoing global inflation.
He even said that it reminds him of gold in the 1970s.
Jones isn’t the only notable investor adding exposure to cryptocurrency to his portfolio.
According to data from Grayscale’s Q2 and half-year report, their BTC Trust product has been seeing massive inflows.
In the first half of the year, institutions poured a total of $1.4 billion into all of the company’s products, averaging $43.8 million per week into the benchmark cryptocurrency.
The weekly inflows into the product grew in the second quarter of the year, in which they averaged $57.8 million.
This notable jump has come about despite BTC’s lackluster price action. This signals that investors are seeking hard assets at the moment, primarily due to the potentially imminent inflation that fiat currencies are bound to see.
Grayscale’s BTC Trust Inflows Exceed Production Rate
The company also notes in their report that the amount of Bitcoin being purchased via their products has exceeded the cryptocurrency’s production rate.
“After Bitcoin’s halving in May, 2Q20 inflows into Grayscale Bitcoin Trust surpassed the number of newly-mined Bitcoin over the same period.”
This has reduced the supply-side pressure placed on the cryptocurrency and is an overwhelmingly positive sign for its macro outlook.
“With so much inflow to Grayscale Bitcoin Trust relative to newly-mined Bitcoin, there is a significant reduction in supply-side pressure, which may be a positive sign for Bitcoin price appreciation,” the company noted in their latest report.
Investors have also been pouring capital into Ethereum, although the average weekly investment is far lower than that seen by BTC, currently sitting at $9.4 million for the first half of the year.
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Cole Petersen, Khareem Sudlow