Grayscale Investments Registers Tripled Inflows in Q3 Led by Institutional Investors

Digital asset management Grayscale Investments, which offers investors access to Bitcoin and other cryptocurrencies in the form of shares, has published on Tuesday its third quarter inflows for 2019, marking a record of over $254 million in total investment into its products.

Accordingly, Grayscale provided details on the inflows in its Digital Asset Investment Report for Q3 2019 for the time period from July 1st 2019 to September 30th 2019.

The New York-based investment firm stated in the report that Q3 inflows amounted to $254.9 million, which is triple the $85 million it posted the previous quarter.  As such, inflows over the past year hit a record $412.M. In total, the firm manages over $2 billion on behalf of institutional investors, wealthy individuals, and hedge funds.

The report further shows that 84% of the new funds came from hedge funds and other institutional investors. Notably, total investments into Grayscale products from January 1st 2019 through September 30th 2019 reached $382.3 million, while the figure over the past 12 months is $412.3 million. Compared to previous quarters, the assets managed in the funds, excluding its flagship GBTC product, grew in total by $107M in the third quarter.

Currently, the digital investment giant operates a total of 10 funds tied to the cryptocurrency market, including ones tied to ZCash, Ethereum Classic (ETC), and its Grayscale Digital Large Cap Fund, which on Monday received clearance from FINRA to trade openly in the over-the-counter (OTC) market. Seemingly, this enables the first publicly quoted security based on a selection of digital currencies in the U.S.

Furthermore, the report shows that 67% of third quarter investments went into the company’s Bitcoin Trust shares, while virtually all the rest went to shares of other cryptocurrencies, Ethereum and Ethereum Classic.  As reported in July, Grayscale Bitcoin trust outperformed indices in the first half of 2019, up almost 300% on the year at the time.

Grayscale’s managing director Michael Sonnenshein attributed recent asset growth to the company’s #DropGold campaign, which launched in May and called on U.S. investors to abandon precious metals and join the Bitcoin movement. He further noted that the asset growth was being driven by traditional funds as well as investors, who decided to make digital currencies part of their portfolio mix.

“Most of our institutional investors are actually not crypto hedge funds,” he said. “It really runs the gamut — we have tons of global macros funds who maybe look at digital assets as a way to be short fiat money or thinking about all the economic and political turmoil going on globally.” 

Following the success of the previous campaign, Sonnenshein stated that a similar capaign will be launched within the near future.