Rise in institutional demand for Bitcoin, Ethereum, crypto-products, as Grayscale steps up its game
The cryptocurrency market has hooked the interest of many investors and it could see another wave of large-scale adoption making way. However, this could not just be due to the price volatility of the cryptocurrencies but also the impending decision of the regulators on various crypto products including the exchange-traded funds [ETFs]. The growing number of inflows within the space has been a tell-tale sign of people turning to crypto to secure financial risks.
According to CoinShare’s Digital Asset Fund Flows Weekly report, nearly 40% of the past week’s inflows to digital asset investment products were allocated to instruments tracking altcoins. Whereas, $97.8 million was invested into crypto investment products between 30th August to 3rd September. Out of these inflows, $38.9 million was invested in altcoin products.
Meanwhile, the report estimated, institutional asset managers currently represented a total AUM of $62.5 billion combined, close to the record-level noted during mid-May of $66 billion. Grayscale has been dominating the space as it represented 73% of the sector’s AUM.
Growing its list of products with different altcoins seemed to align with the company’s expansion plans before the U.S. SEC approves the first ETF. Grayscale Investments is also the world’s largest digital asset manager with nearly $50 billion in AUM. However, as the asset manager awaits approval from the United States Securities and Exchange Commission [SEC], it recently announced three of its single asset products have become SEC reporting companies. These included Grayscale Bitcoin Cash Trust [BCHG], Grayscale Ethereum Classic Trust [ETCG], and Grayscale Litecoin Trust [LTCN].
These assets join the league of Grayscale’s Bitcoin [GBTC], Ethereum [ETHE], and Digital Large Cap Fund [GDLC] trusts that report to the regulators, with regular financial statements and disclosures, and comply with all other requirements stipulated in the SEC ACT of 1934. Meaning, all six offerings will now be regulated to publicly traded companies on national bourses such as Nasdaq or the New York Stock Exchange.
This was the result of rising interest of investors in not only Bitcoin but other crypto assets too, as highlighted in CoinShare’s report. According to Michaell Sonnenshein, CEO of Grayscale, the SEC reporting companies, have “opened Grayscale to a wider audience of investors who are typically used to seeing that [type of reporting] when they think about making investments.”
With interest among institutions climbing higher by the day, the asset management firms like Grayscale may take the opportunity to pocket this interest with more range of crypto products.
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Namrata Shukla, Khareem Sudlow