Grayscale Investments has released the Grayscale Digital Asset Investment Report for the first half of 2018, detailing how it has had the strongest investment inflows in the history of its business despite the cryptocurrency market downturn that saw Bitcoin decline from USD 20,000 to USD 6,000. Now, Grayscale Investments has an overall portfolio of USD 248.39 million, with new investments of USD 9.55 million per week on average, with a few weeks in the USD 20-30 million range.
The data in this report is hard evidence that institutional investors are entering the crypto space. some 56% of Grayscale Investments’ holdings are from institutional investors, with another 20% from accredited investors, which are required by the Securities and Exchange Commission (SEC) to have at least USD 1 million of savings. Many crypto experts have been saying that institutional investment will lead to the next big crypto rally.
Grayscale Investments directly invests in cryptocurrencies via investment trusts that it has developed. It offers Bitcoin, Ethereum, Ethereum Classic, Bitcoin Cash, Zcash, XRP, Litecoin, and the Digital Large Cap fund which is a combination of various cryptocurrencies.
Bitcoin makes up 63% of Grayscale Investments’ portfolio – a value of over USD 150 million. This indicates that Bitcoin is preferred over all other cryptocurrencies by investors. Generally, Bitcoin is considered the gold standard of the crypto world, since it is the original cryptocurrency, the most reputable, has the best track record, and has the most liquidity. All of these factors make Bitcoin ideal for institutional investment versus any other cryptocurrency.
On average, each institutional investor bought USD 848,000 of cryptocurrency through Grayscale Investments, far more than the average of USD 289,000 purchased by accredited individuals. There were some outlier investments far larger than the averages. Most (64%) of the investments came from the United States, 26% from offshore accounts like the Cayman Islands, and 10% were from the rest of the world.
Overall, this report from Grayscale Investments is more positive news regarding increasing institutional investment in the crypto space. Galaxy Digital, Andreessen Horowitz, Hedge Fund King Steven Cohen via Autonomous Partners, and Benson Oak have recently invested a combined total of over USD 1 billion into crypto and blockchain.
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