Grayscale Adds Chainlink (LINK) to its Digital Large Cap Fund

Grayscale Investments, the world’s largest digital asset manager, has rebalanced its Digital Large Cap Fund (GDLC) composition to make the crypto asset LINK part of it.

Built on Ethereum, Chainlink is an oracle service provider which was recently announced by Grayscale as a single-asset investment product.

The 10th largest cryptocurrency by market cap of $14.17 billion is the only one qualified for this inclusion in the Fund, out of the other four latest additions, LivePeer (LPT), Filecoin (FIL), Decentraland (MANA), and Basic Attention Token (BAT) by Grayscale. The Fund’s composition is evaluated every quarter.

The Fund’s portfolio, a passive rules-based strategy that seeks to provide exposure to 70% of the digital asset market, has been adjusted by selling its existing components. The cash proceeds from that were then used to purchase LINK.

As of April 2nd, 2021, the Fund is a composition of 79.8% Bitcoin (BTC), 17.5% Ethereum (ETH), 0.80% Bitcoin Cash (BCH), 1.00% Litecoin (LTC) and 0.90% Chainlink (LINK).

On April 1st, Grayscale added 65.67k LINK and now holds a total of 115.57k LINK, worth just over $4 million.

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Author: AnTy

Grayscale Closes Private Placement in GBTC, Which Holds 3.5% of Bitcoin’s Circulating Supply

Meanwhile, the GBTC continues to trade at a discount as Grayscale, which does not have any redemption program, works on converting it into an ETF.

It’s been close to two weeks that Grayscale Investments, the world’s largest digital asset manager, has seen any inflows in its Bitcoin Trust (GBTC).

This is because the fund has closed any private placement for now. The message on the website reads,

“The Grayscale Bitcoin Trust private placement is offered on a periodic basis throughout the year and is currently closed.”

As of writing, GBTC has 655,360 BTC, representing just over 3.5% of Bitcoin’s circulating supply, $37.1 billion worth of total holdings.

This has been while GBTC continues to trade at a discount since late February. Much like GBTC, ETHE is also at a discount of 7%. While Grayscale Ethereum Trust is currently open, it only added 3,769 ETH this month, as per Bybt.

Grayscale’s infamous premium has provided hedge funds an opportunity to arbitrage, who deposit the coin with GBTC in exchange for shares that are worth more than the market value of BTC, and this premium is pocketed by them when they sell the marked-up shares after a six-month lock-up period. Nic Carter, of crypto-focused venture firm Castle Island Ventures, told Bloomberg,

“It became just too popular and there’s only so much demand at the end of the day by retail investors who are using Schwab or using Fidelity or a traditional brokerage.”

“Basically, too many funds plowed capital into this trade thinking it was a slam dunk, and then as that capital matured and the units in the trust became market-tradable, the demand that they expected to materialize wasn’t there from the market.”

Grayscale’s crypto products do not have a redemption program as assets are held in a trust currently; shares can only be created.

And the asset manager halts creations from time to time. “The Trust may, but will not be required to, seek regulatory approval to operate a redemption program,” states the website.

Bitcoin bull Cathie Wood of Ark Investment Management is one of the largest holders of the Trust along with Horizon Kinetics LLC and Churchill Management Corp.

This week, Digital Currency Group, the parent company of Grayscale, announced that it would be buying up to $250 million worth of GBTC shares.

As we reported, Grayscale is working on the process of becoming an exchange-traded Fund (ETF) as it hires several ETF executives.

While the US has yet to approve one, Canada has already seen two ETFs that made their debut last month and saw a great response. The first Purpose Bitcoin ETF (BTCC), has amassed $464 million in assets, while another one, Evolve Fund Group’s Bitcoin ETF (ticker EBIT), has attracted $42 million so far.

In the light of the growing demand for Bitcoin products, now US ETF issuers are getting creative. Simplify US Equity Plus Bitcoin ETF (SPBC) is investing up to 15% of its assets in cryptos either “indirectly and solely” through GBTC, as per a filing. Financial Enhancement Group’s Andrew Thrasher said,

“This fund will appeal to a lot of advisors who have had an interest in getting exposure to Bitcoin or have clients asking for crypto.”

“This gives the potential to have Bitcoin exposure within a traditional custodian account in an ETF wrapper, which hasn’t been done in the U.S. due to SEC resistance to approve a pure Bitcoin ETF.”

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Author: AnTy

Purpose Bitcoin ETF (BTCC) Becomes Leader by Just Being the First Mover

This doesn’t bode well for Grayscale Bitcoin Trust (GBTC), which doesn’t have a redemption option. Already all three Bitcoin closed-end funds (CEF) in Canada went into discounts, but they do have redemption programs.

Last week, the first Bitcoin exchange-traded fund, Purpose Bitcoin ETF (BTCC), made its debut on the Toronto exchange, and it received an amazing response.

Launched on Feb. 18, it has already attracted more than $500 million of investor capital.

This week, TMX Group will be listing options around the Purpose Bitcoin ETF on the Montréal Exchange to cater to both the retail and institutional investors. Som Seif, founder, and CEO of Purpose Investments said,

“This is great news for investors and a powerful display of innovation in motion.”

“Not only does this provide investors with more ways to gain exposure to Bitcoin, but it also really cements the idea that Purpose Bitcoin ETF is the premier tracker of the cryptocurrency in North America.”

Now, another firm, Evolve Fund Group in Canada, has lowered the price on its Bitcoin ETF, EBIT, to 0.75% from 1% to compete. With this move, EBIT has now become cheaper than the 1% expense ratio of its competitor, the Purpose Bitcoin ETF.

BTCC started trading just a day before Evolve’s offering. However, compared to BTCC’s more than half a billion in assets, EBIT has only captured $28 million. Ben Slavin, head of ETFs for BNY Mellon Asset Servicing said,

“BTCC illustrates the importance of first-mover advantage in ETFs.”

“A one-day head start was all that was required to establish a clear lead for Bitcoin ETFs in Canada.”

On the first day of trading, more than $165 million worth of shares in the Purpose product changed hands, while for EBIT, it was just $14.6 million.

According to James Seyffart of Bloomberg, the launch of Bitcoin ETF in Canada doesn’t bode well for Grayscale Bitcoin Trust (GBTC) either because it doesn’t have a redemption option yet.

He noted how all three Bitcoin closed-end funds (CEF) in Canada went into discounts, BTCG down under -16%, immediately when BTCC began trading. But Candian CEFs have redemption programs, so that should limit discounts around month-end, he said.

As a matter of fact, on Thursday, the premium on GBTC also went negative to its lowest level. This huge demand for the Candian fund has also ramped up the interest in the US for issuers to gain first approval in launching a Bitcoin ETF. Nate Geraci, president of the ETF Store, an advisory firm said,

“Prospective Bitcoin ETF issuers in the U.S. must be salivating after witnessing the debut of BTCC, but they’re also likely feeling much more pressure now.”

“It’s reasonable to assume the winner of the U.S. Bitcoin ETF race stands to benefit significantly.”

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Author: AnTy

Institutional Demand in Bitcoin is Increasing at an ‘Accelerating Pace’ in 2021: Grayscale CEO

Institutional Demand in Bitcoin is Increasing at an ‘Accelerating Pace’ in 2021: Grayscale CEO

  • Institutional digital asset investment, Grayscale CEO, Michael Sonnenshein says companies’ interest in Bitcoin is increasing at an accelerating pace.
  • Could 2021 be the year institutions finally take over the crypto space?

The crypto market is still buzzing off Tesla’s $1.5 billion bets on Bitcoin as the company designated 7.7% of its cash reserves to purchase Bitcoin (BTC) last month. In an interview with CNBC’s Squawk Box on Wednesday, Grayscale CEO, Michael Sonenshein, said this latest trend of institutions such as Tesla, Square, PayPal, and Twitter adding Bitcoin to their operations and balance sheets is set to boost across 2021.

Notably, companies prepare themselves to add Bitcoin to their reserves this year as the sentiment around the digital asset switches, Sonnenshein said. In particular, Michael Saylor, Jack Dorsey, and Elon Musk have started a Bitcoin movement that is spreading across institutions like wildfire, he added,

“I wouldn’t be surprised to see there being almost some sort of a race now — you have Elon Musk, you have Michael Saylor, Jack Dorsey.”

“You’re gonna see a lot of other visionary leaders in disruptive companies actually realizing that it’s really moved from ‘why’ to ‘why not,’ and see which companies are next to get involved in having Bitcoin as part of their treasury program.”

Institutional demand for BTC is not only increasing, but it is doing so at an accelerating pace, according to Sonnenshein. The inflows on Grayscale so far in 2021 are outpacing last year’s inflow, which could be a key indicator that the demand for Bitcoin is accelerating. He said,

“I’m very pleased to say and encouraged that that momentum is not only continuing this year but is actually accelerating.”

“So we’re seeing very, very sustained and growing demand from a lot of institutional players at the moment.”

One of the reasons that institutions are flocking into Bitcoin is “regulatory concerns,” Sonnenshein explained. Those tasked with company treasuries are increasingly finding ways to invest in digital assets legally, and the “no-regulation” narrative is slowly fading.

Secondly, companies are also focusing on the size of their reserves and timing. MicroStrategy made several buys across 2020 totaling $1.3 billion, while Tesla made a one-off payment. According to the Grayscale CEO, institutions are more likely to move to buy in intervals than a one-off buy. He explained,

“I think the second piece of the conversation is around sizing and timing.”

“[Institutions] they recognize that they don’t need to get invested all at once.”

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Author: Lujan Odera

Is Digital Asset Powerhouse Grayscale Looking to Add LINK, XTZ, FIL, BAT, & MANA Trusts?

Is Digital Asset Powerhouse Grayscale Looking to Add LINK, XTZ, FIL, BAT, & MANA Trusts?

Is Grayscale setting up to create a series of new digital asset trusts? The question arises after new filings were discovered via the State of Delaware’s Division of Corporations where someone set up a Grayscale ChainLink Trust dated to Dec 18th, 2020.

Adding more credence to a new push for digital asset trusts came on the same day when a further four trusts were created for Basic Attention Token (BAT), Decentraland (MANA), LivePeer (LPT), and Tezos (XTZ).

What lends more validity to speculation that this is the start of an official move by Grayscale is its working relationship with the Delaware Trust Company. In the past, Grayscale filed its Bitcoin Trust through the same entity in 2013 and is currently listed on their website as a service provider.

On the other hand, Grayscale is not the one listed as the agent on these trusts; instead, ‘Delaware Trust Company’ is the one listed. Those looking on with enthusiasm should also be aware that the attrition rate associated with trusts make them far from a sure thing. In October 2020, for example, a Filecoin Trust (FIL) was introduced, with very little in the way of developments from it since. Grayscale also filed a trust for Stellar Lumen (XLM) back in October 2018 but was made public within six weeks.

Trust Uncertainty – Shake-ups at Grayscale

A change in leadership at Grayscale may also throw all 5 of these trusts into uncertainty. A few weeks after these trusts were put forward, Founder & CEO of Grayscale, Barry Silbert, announced that he would be stepping down and was later replaced with Michael Sonnenshein. It’s uncertain whether his successor will stay the course with Silbert’s exit or take the company down his path.

Regardless of the speculation surrounding these five trusts, advocates for ChainLink (LINK) didn’t hesitate in taking to social media to express their support of Grayscale. Over the last few months, Chainlink has managed to surpass the likes of altcoins like Bitcoin Cash (BCH), making the former the eighth largest cryptocurrency valued at over $9bn.

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Author: James Fox

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.

image1

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