GBTC Added $1.6B in December But Grayscale Hasn’t Purchased Any BTC in Over a Week

GBTC Added $1.6B in December But Grayscale Hasn’t Purchased Any BTC in Over a Week

The firm hasn’t purchased any ETH in nearly a month while its total AUM has reached a new ATH of $20 billion.

The largest crypto asset manager Grayscale Investments has ended 2020 at $20 billion in assets under management (AUM).

This is a huge uptick in a year that started with just $2 billion. But this journey has just started as Barry Silbert, founder and CEO of Digital Currency Group (DCG) tweeted, “Here’s to another 10x in 2021.”

Grayscale Bitcoin Trust (GBTC) is also standing at the peak of $19.44 billion.

During the last bull run of 2017, GBTC had $2.5 billion in AUM which declined to $750 million during the 2018 bear market. But since then it has been only going up and last year it gained speed thanks to all the institutional interest Bitcoin has been seeing.

Relentless money printing by central banks all over the world, fiat debasement, USD weakness, and zero and ultra-zero interest rates worked in Bitcoin’s favor and in turn Grayscale.

The price of BTC surged more than 315% in 2020 to hit several all-time highs above $29,000, which are surely influenced Grayscale’s AUM.

However, Grayscale also added a good amount of BTC to its stash. In 2020, Grayscale’s BTC holdings doubled from 261 BTC to 607k BTC.

Adding approximately $1.6 billion in Dec. 2020 alone, amidst BTC’s face-melting uptrend, is “beyond impressive; in 2020 it would have added 6% as much as all gold ETFs and similar vehicles,” noted trader and economist Alex Kruger while sharing his expectation of major central banks eventually holding BTC as a reserve asset.

Kruger noted that gold demand in 2020 was mainly driven by investors’ i.e. ETFs. “Assuming now in five years central bank’s demand for bitcoin stands at 5% of their gold demand. That would generate $1.2 billion in additional bitcoin buying pressure,” he said.

When it comes to GBTC, Grayscale holds 3.26% of Bitcoin’s circulating supply but they haven’t bought any Bitcoin since Dec. 25th and the firm’s ETH stash hasn’t increased since Dec. 9.

Grayscale Ethereum Trust (ETHE) has $2.28 billion in AUM and holds 2.94M ETH, which is 2.57% of Ether’s circulating supply.

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Author: AnTy

eToro and CEX Suspend Trading for US Customers; Grayscale Buys 3.23M XRP

eToro and CEX Suspend Trading for US Customers; Grayscale Buys 3.23 Million XRP

eToro, the social trading, and multi-asset brokerage company is the latest one to suspend XRP trading. The crypto-friendly firm will suspend trading on Jan. 3 for its US customers who will have until Jan. 24 to sell their XRP holdings.

Cryptocurrency exchange CEX, which manages about $11 million in volume also announced on Thursday that they will be delisting XRP for its US customers.

XRP XRP 6.48% XRP / USD XRPUSD $ 0.24
$0.02 6.48%
Volume 5.96 b Change $0.02 Open $0.24 Circulating 45.4 b Market Cap 10.86 b
8 h eToro and CEX Suspend Trading for US Customers; Grayscale Buys 3.23 Million XRP 1 d Binance US, Genesis, & Abra Suspends XRP Support; Bittrex & Uphold Clarifies No Plan to Delist 2 d SEC vs Ripple Pretrial Conference Set for Feb; Majority of Customers & XRP Volume Not in the US
trading and deposits will be halted on Jan. 14, 2021, while any open orders will be canceled a week after on Jan 21.

“XRP withdrawals are available,” stated the exchange adding that users from other countries are not affected.

Meanwhile, the reports of Grayscale selling a good 25% of its XRP holdings have been quashed by the company as it denied any such “large sales of underlying assets.”

As we reported the data from ByBt showed that Grayscale Investments’ sold 9.19 million XRP but now it shows that Grayscale’s XRP holdings have rather surged to 38.88 million as of Jan 1st, 2021 — an increase of 3.23 million XRP from Dec. 29.

Grayscale Investments XRP Holdings

Source: Bybt.com – Grayscale Investments XRP Holdings

Top exchanges like Binance, Bittrex, Bitstamp, and Coinbase have also discontinued XRP trading services for their US customers. Coinbase is also hit with a class-action lawsuit for allowing to trade XRP while knowing it was a security and profiting from the sale of the digital asset.

All these decisions have been made in the light of the recent Securities and Exchange Commission’s (SEC) action against Ripple Labs, Inc. The SEC alleges that Ripple and its two top executives, co-founder Charis Larsen and CEO Brad Garlinghouse sold unregistered security XRP.

The initial pretrial conference between both parties has been set for late February.

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Author: AnTy

Bitcoin Goes Ballistic on Christmas; Will BTC Hit $25k in 2020?

Bitcoin has hit a new ATH today at $24,720. Grayscale Bitcoin Trust meanwhile holds 607.27k BTC.

Bitcoin is looking ready to smash $25,000 on Christmas. A new day, a new ATH is the theme of 4Q20 for the BTC.

Given that the world’s largest cryptocurrency is on a price discovery, after breaking the 2017 peak of $20,000, it is what Bitcoin is now all about.

The week started on a red note and we dropped to $22,100 but ever since hitting a new peak, these small pullbacks BTC have been seeing have been reversed very shortly.

This week has been in contrast with the last week when BTC went from $18,000 to last weekend’s $24,300 high. Trader and economist Alex Kruger said,

“The crypto market became extremely levered up since the 20K breakout, which can be appreciated in futures basis and open interest spiking across the curve, and implied volatility spiked higher as traders repriced. High leverage translates into weaker hands and makes price vulnerable to large corrections. That is why we have been seeing such large two-way price moves since 20K. This is normal given such market dynamics.”

Strong Accumulation

To celebrate Christmas today, Bitcoin is looking to break through multiple levels. After yesterday’s brief trace to $22,600, we are onto new heights with a 5.5% spike and over a $1,000 green candle.

But the volume is currently low at just about $4.14 billion.

“BTC will break $25k without retesting $21k,” is what Ki Young Ju, CEO of data provider CryptoQuant expects to happen.

An interesting facet is the number of addresses holding at least 1 BTC on Christmas Eve.

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Source: Glassnode

These numbers have been consistently going up ever since the beginning of the Bitcoin, with the 2018 bull market exception when they saw a small drop. It was in December of 2018 that bitcoin bottomed at around $3,200.

Gobbling up Every Dip

Amidst all the price weakness, institutional buyers have been scooping off these dips in BTC that are followed by sharp reversals.

Coinbase has been seeing big outflows lately, reflective of massive OTC deals. On Wednesday, it hit 24,000 BTC, and then yesterday another big outflow was recorded from the San Francisco-based cryptocurrency exchange, as per CryptoQuant.

Everyone wants in on Bitcoin in the current uptrend. ByteTree founder Charlie Morris has “identified 50 companies, typically in the tech space, with surplus cash,” which are growth companies but not high dividend payers presenting a huge opportunity for BTC, if they decide to follow the same path as MicroStrategy and Square.

Also, Grayscale AUM has reached $16.4 billion while its BTC holdings have climbed to 607.27k BTC, representing 3.2% of Bitcoin’s circulating supply.

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Author: AnTy

JPMorgan: Flows into Grayscale “Too Big,” GBTC is the Guide to Bitcoin’s Next Move

JPMorgan: Flows into Grayscale “Too Big,” GBTC is the Guide to Bitcoin’s Next Move

For now, GBTC is oversubscribed, and the premium has climbed to nearly 36%, last seen in February this year.

In its last Flows and Liquidity report for the year, JPMorgan Chase noted, “alternative currencies” like Bitcoin and gold have been the main beneficiaries of the pandemic.

Although compared to a $13.1 trillion increase in the value of total bonds and $11 trillion in equities, Bitcoin’s gains have been a paltry $0.3 trillion; it has been enough to push the price of the digital asset past the all-time high.

“There is little doubt that momentum traders, such as CTAs and quantitative crypto funds, amplified this week’s surge,” the strategists led by Nikolaos Panigirtzoglou wrote in a note Friday.

This made the bank strategist question, “how much of vulnerability do these momentum traders pose for bitcoin at the moment.”

In the short-term, the bank said it is “difficult not to characterize bitcoin as overbought at the moment.” Looking back, the last time momentum traders were so long bitcoin was in June 2019, it said.

The strategist went on to say that the odds of a correction would increase if the flows into the digital asset slow down significantly.

They noted that inflows into the largest digital asset fund, Grayscale Bitcoin Trust, are currently running at about $1 billion per month. GBTC’s assets under management have climbed above a record $13 billion this year, up from $2 billion at the start of December last year.

The flows into GBTC “are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics,” said the strategists adding a major slowdown in those flows would increase the risk of a correction akin to the one in the second half of 2019.

For now, GBTC remains oversubscribed with a queue to get in. With investing in it taking weeks now, people are unable to get into GBTC right away.

This heightened demand has the premium on GBTC surging to nearly 36%, last seen in February this year.

Furthermore, looking at CME bitcoin futures, the report notes the open interest on them has increased by an astonishing 45% since last Friday to reach a record high of $1.4 billion.

As such, “it is difficult to not become concerned about a buildup of speculative long futures positions in bitcoin,” noted JPMorgan only to add “any previous attempts to call for mean reversion in these two indicators proved futile.”

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Author: AnTy

“Outrageous Demand” for Bitcoin & Crypto from Retirement IRAs

  • Grayscale continues to add Bitcoin to its stash, currently holding 570,860 BTC.
  • In the past six months, GBTC’s holdings have grown by 56% to represent more than 3% of Bitcoin’s circulating supply.

As we reported, Michael Sonnenshein, Managing Director of the Grayscale Investments, said the most extensive digital assets manager had seen inflows that “are now probably up 6x what they were last year.” Sonnenshein said in an interview on Thursday,

“It’s some of the world’s largest investors and the allocations that they’re making are bigger than we’ve ever seen before and their time horizon for this is generally something over the medium to longer-term.”

This growing demand can be further seen in the premium that people pay to get exposure to digital assets through Grayscale.

GBTC shares are currently trading at a premium of more than 30%. This premium has been slowly grinding up since early October, when it was just around 6%. However, we are nowhere near the 132% premium people paid in March 2017. On-chain analyst Willy Woo said,

“Wow 33% GBTC premium, that’s outrageous demand for Bitcoin via retirement IRAs.”

“If I was a Euro Pacific shareholder I’d be wondering why the company is not getting in on that obvious growth business. Like Kodak revolutionized photos until one day it didn’t run towards digital.”

However, it’s not just Bitcoin that Grayscale users are after. The premium on other products is even higher than GBTC except for its BCH product, which is actually on a discount (-13%).

ETHE is trading at 170% premium, ETCG 43%, and LTCN at the most significant 2,259% premium. Trader and economist Alex Kruger said,

“When crypto heats up, premiums to Net Asset Value (NAV) for Grayscale products skyrocket.”

“Driven by dumb money buying Grayscale products from a brokerage.”

Grayscale is currently holding 2.94 million ETH, 948.34k LTC, 12.29 million ETC, 225k BCH, 35.65 million XRP, 18.94 million XLM, 192.7k ZEC, and 450.11k ZEN.

In an attempt to protect the average folk by restricting access to asset purchases, SEC has ended up creating “a racket where the many subsidize the few,” said Alex Kruger. Because primary issuance is for accredited investors, an average person has to buy in the secondary market to pay a premium.

The institutions that are buying GBTC do so directly from Grayscale at a 2% fee with a 6-month lock-up but gain a premium twice a year.

The crypto market has repeatedly pointed out that more competition and ETF getting approval from the US Securities and Exchange Commission will push these premiums down.

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Author: AnTy

Grayscale Amasses 552.5k Bitcoin and Almost 3 Million ETH with Latest Big Accumulations

Grayscale Investments continue to gobble up more and more Bitcoin, and now it has its eyes set on Ether as well.

All this buying has Grayscale Bitcoin Trust amassing 552.5k BTC so far, worth more than $10 billion. GBTC currently has almost 3% of Bitcoin’s circulating supply.

As per the company’s Dec. 3rd filing with the US Securities and Exchange Commission (SEC), they added another nearly 14,592 BTC worth over $280 million to its holdings.

GBTC is currently trading at a premium of around 15% to BTC price, cut down in half since last week. The premium started trending up in early October along with the jump in the price of Bitcoin but has been keeping under 30% throughout 2020 except for a handful of occasions.

This premium is a function of “exposure to bitcoin in a regulated vehicle without having to deal with the challenges of custody, eligibility to some tax-efficient schemes, strong distribution through regular brokerage accounts, lack of alternatives such as an ETF,” noted data provider Skew in its report.

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Source: Grayscale Investments BTC Holdings

However, it is not just Bitcoin that Grayscale’s institutional investors have their eyes on. Grayscale’s ETH stash is ready to hit 3 million, currently at 2.94 million ETH worth nearly $1.7 billion.

This Ether accumulation actually saw a big spike on Wednesday, which means this week institutional investors bought the dip on ETH.

Ether is currently trading at $560, up from yesterday’s low of $530, while Bitcoin is around $18,240, has managed to recover from yesterday’s drop to $17,650.

Grayscale Ethereum Trust (ETHE) is trading at a premium of a whopping 127%, down from 900% in June.

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Grayscale Investments ETH Holdings

Institutions are coming into the cryptocurrency market at a fast pace in 2020 as the market enters into another bull cycle.

Bitcoin is gaining attention as digital gold and inflation hedge this year, while Ethereum blockchain is becoming the most actively used with its token Ether solidifying itself as an asset class.

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Author: AnTy

Grayscale to Split ETHE Shares 9 for 1 In Its Ethereum Trust ($1.6B AUM) On Dec. 17

  • Digital Currency Group’s Grayscale Investments announced a 9-to-1 share stock split on its Grayscale Ethereum Trust shares (ETHE).
  • This aims to boost investors’ liquidity and participation as the shares become more affordable for retail investors.

In an announcement on Wednesday, Grayscale Investments plans to add eight ETHE shares to each ETHE share held on the exchange. The Grayscale Ethereum Trust share stock split will be effected on December 17th on registered users’ shares at the close of business on Monday, December 14th. No action is required from the users to receive the split shares, “and they will not be required to surrender or exchange their shares in the Trust,” the statement reads.

Grayscale’s Ethereum Trust Fund closely resembles an Ethereum ETF allowing investors to gain exposure to the cryptocurrency. The fund is listed on the stock market with a share representing a fraction of ETH (plus a hefty premium in management fees) bought using the pooled investor’s cash and held in Grayscale’s vaults.

Currently, Grayscale’s ETHE fund has a total of 29.5 million issued and outstanding shares, with each share representing 0.09284789 ETH in the pool. Following the share split on Dec. 17, one share’s total value will represent the ownership of 0.01031643 ETH, as the total number of issued and outstanding shares grows to 265.5 million Grayscale ETHE shares. This means that the total allocated value will not change once the stock split is complete.

According to the statement, one of the biggest reasons motivating the stock split is to make the share more affordable to retail investors. In 2020, the Grayscale Ethereum Trust share price has skyrocketed from $60 to $110 as the price of ETH reached a three year high of $635. This shows that a continued rise in ETH price could make it too expensive for retail investors to buy the share.

Grayscale has posted a successful year so far, growing their Bitcoin holdings to over 500,000 BTC, holding 2.7% of the total BTC supply.

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Author: Lujan Odera

Bears in Disbelief: Grayscale Holds 2.7% of Bitcoin Supply, Galaxy Posts Strong Results

Grayscale Investments now holds more than 500,000 Bitcoin in its BTC Trust.

Amidst the ongoing rally that saw BTC hitting $17,700 today, Grayscale Bitcoin Trust also increased its BTC stash, now holding about 2.70% of Bitcoin’s supply. This percentage number goes further up when taking the millions of lost Bitcoin into consideration.

The world’s largest Bitcoin investment product is trading at a 20.7% premium to Bitcoin’s actual price. The company also charges an annual fee of 2%.

Its share GBTC has increased 152% in value in 2020, currently trading at $20.32.

Last week, the fund reported its largest weekly inflow ever with 15,907 BTC worth $215 million.

In the crypto market, bears are also in disbelief with yet another strong week. After recording six green weeks in a row, Bitcoin is at January 7, 2018, highs. This has roughly 99% of the addresses currently holding BTC in profits.

The open interest on CME just went up to a new all-time high of $975 million, accounting for 15.4% of the total open interest in the futures market, which is also at an all-time high of $6.3 billion.

Bitcoin’s blockchain activity is also growing, with the 7-day average of the amount of active BTC addresses at its highest since January 2017 after progressing strongly throughout the bull run this fall.

Not just Bitcoin, but Grayscale’s Ethereum product is also seeing an increase in interest. Grayscale’s Ethereum Trust (ETHE) now holds 2.24% of ETH’s entire cap or $1.175 billion worth of Ether.

In total, Grasyacle has a total of $9.9 million in assets under its management.

Elsewhere, Mike Novogratz’s OTC trading firm, Galaxy, posted strong results in Q3 2020 with over $1.4 billion in trading volume, an increase of 75% YoY. Even LMAX saw its best month ever in Sept. with more than $10 billion in volume.

Galaxy’s net income also came in stronger than last year’s at $44 million vs. a $68 million loss in Q3 2019, which was primarily blamed for the steep losses.

The firm acquired two companies: crypto lender DrawBridge and market maker Blue Fire Capital while sharing its plans to expand in Canada through a partnership with major Canadian investment company CI Global Asset Management to launch a public Bitcoin fund in the country.

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Author: AnTy

Millennials Are Not the Only One Driving “Further Demand” for Bitcoin: JPMorgan

Covering the steepening of cumulative flow trajectory in Grayscale Bitcoin Trust in recent weeks, JPMorgan yet again shared a bullish view on Bitcoin.

According to the largest investment bank, Bitcoin’s corporate endorsements, such as PayPal, have “propagated further demand” for the digital asset.

This can be particularly seen in the ascending of GBTC, which as per JPMorgan suggests that the demand for the leading digital currency is “not only driven by the younger cohorts of retail investors,” the millennials but also institutional investors that includes family offices and asset managers.

Institutional investors are actually the biggest investors in Grayscale’s products.

Grayscale Bitcoin Trust’s October flow trajectory was rather impressive because of the modest outflows seen in the flow trajectory of gold ETFs in comparison. JPMorgan wrote in its latest report,

“This contrast lends support to the idea that some investors that previously invested in gold ETFs such as family offices, maybe looking at bitcoin as an alternative to gold.”

In its last report, the bank noted that because of its competition with gold as an alternative currency, Bitcoin’s potential long-term upside is considerable, as much as 10x from the current level to match the total private actor investment in the precious metal.

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Meanwhile, the current rally has BTC near its “overbought levels,” which means a sell-off could be seen soon, noted the analysts.

Grayscale actually added $500 million in new assets under management in a single day that brought its total AUM at over $9 billion. As we reported, Q3 has been yet another record quarter for Grayscale with $1 billion in inflows.

Last week has been another explosive week for the company, as shared by its Managing Director, Michael Sonnenshein.

The world is choosing Bitcoin as a safe haven over other asset classes at a fast pace, which only puts further pressure on the supply side.

With Grayscale having record inflows, Square selling about double the number of Bitcoins that are being mined, and PayPal, which is 3x of Square and has “eager” customers, also joining in, things are going to get even more interesting.

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Author: AnTy

BlockFi Acquires a 5% Stake in the Grayscale Bitcoin Trust (GBTC), Becomes a Top Shareholder

BlockFi, the crypto lending focused firm, has invested in the Grayscale Bitcoin Trust (GBTC), becoming one of the biggest shareholders. According to a filing made with the U.S Securities Exchange Commission (SEC), the firm purchased 5.07% of the GBTC Trust. Notably, companies in the U.S are required to report through form 13G if they own more than 5% in another firm.

The filing further reveals that the shares acquired by BlockFi translate to 24,235,578 of the GBTC Trust. Going by the latest Grayscale annual filings, this value is roughly 24,235.578 Bitcoins, given that every share is priced at 0.0001 BTC. As per the prevailing crypto market prices, the BlockFi investment in GBTC is roughly $328 million.

GBTC has been operational since 2013, pivoted as a Bitcoin buying avenue without owning the underlying crypto themselves. Currently, the firm manages an AUM of over $6 billion, acquiring an SEC license earlier in the year. In recent months, its value has been growing exponentially, with Q3 inflows breaking record highs to hit the $1 billion mark.

The CEO of BlockFi, Zac Price, said that the move to invest in GBTC is part of an effort to serve their clients better,

“There are lending markets alongside investment opportunities related to the product, and our significant participation enables us to add value for our clients and the marketplace for liquid and illiquid GBTC shares.”

BlockFi is not the only crypto-focused firm that has acquired a significant share of the GBTC Trust; back in June, Three Arrows Capital bought 21,057,237 shares, roughly 6.26% of the total trust at the time.  

Also Read: BTC Potential Investors’ Market Increases by 52% to 32 Million in 2020: Grayscale Survey

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Author: Edwin Munyui