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 Investments Buys 2,170 BTC, No ETH Yet While Dissolving XRP Trust Altogether

Grayscale Investments Buys 2,170 BTC, No ETH Yet While Dissolving XRP Trust Altogether

It has been a month and a week since ETHE has added any new Ethereum to its holdings, but the GBTC has got the ball rolling. Meanwhile, XRP’s delisting from major exchanges creating the issue of liquidity.

So, it has started!

After closing access to its products and not making a single purchase since Christmas, the world’s largest crypto asset manager has set things in motion again.

This week, Grayscale Investments opened the business again for new investors and started it by adding 2,170 BTC, worth about $83.5 billion at a current Bitcoin price of $39,640.

With this latest purchase, Grayscale’s Bitcoin Trust (GBTC) now holds a total of 608,810 BTC, 3.27% of Bitcoin’s circulating supply.

This purchase coincided with an 18% jump in the price of Bitcoin from yesterday’s $32,400 low. Interestingly, Bitcoin price has been ripping higher lately in tandem with all the Grayscael’s Bitcoin buying frenzy and Coinbase’s big BTC outflows that represent the institution’s involvement.

While Grayscale has started adding more BTC to its stash, the asset manager has yet to add more ETH. It has been a month and a week since ETHE has added any new Ethereum to its holdings, still keeping at 2.93 million — 2.5% of Ether’s total circulating supply.

Currency or Security!

Coming on to XRP, Grayscale has decided to dissolve its XRP Trust following the Securities and Exchange Commission’s lawsuit against Ripple and its top two executives for allegedly selling unregistered security.

The announcement came on Wednesday in which the firm mentioned the delisting of XRP from major platforms as a reason behind its move because “it is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP into U.S. dollars, and therefore continue the Trust’s operations.”

As such, the Trust has “liquidated” the XRP and intends to distribute the net cash proceeds to Trust shareholders. Just a few days back, the firm announced the liquidation of the XRP position from its Digital Large Cap Fund as well.

This move by the wide crypto market, however, has been limited to US customers. Japan is particularly clear about its stance on XRP, with Ripple partner SBI Holdings’ clarifying that the digital asset is, in fact, not a security.

Japan’s Financial Services Agency (FSA) has also said that it views XRP as a currency based on the Payment Services Act and not as a security (FSA also said this back in May of 2019). The same is the case in the UK, where XRP is considered an “exchange token.”

Ripple CEO Brad Garlinghouse also maintains that the majority, 95% of XRP trading, happens outside the US. The digital asset, meanwhile, is trading under $0.30.

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Author: AnTy

Fidelity Increases Its Stake in the First Hong Kong Regulated Crypto Exchange, OSL

Fidelity Investments, a leading global asset manager interested in crypto, has increased its capital allocation to BC Technology Group. This firm runs the first crypto asset exchange to be licensed in Hong Kong, OSL. According to the regulatory filing, Fidelity increased its ownership stake from 5.29% to 6.29% after acquiring an additional 3.3 million shares at HK$52.3 million ($6.7 million).

Before this event, Fidelity’s shares at BC Technology stood at 17,795,500, an investment that the asset manager acquired last year at a rough figure of $14 million. The latest increment is a sign of the bullish outlook in being exposed to Hong Kong crypto markets where regulators seem to have been slowing capital inflows. Notably, BC Technology raised around $90 million in a top-up share placement last week.

Having received the Hong Kong license, OSL crypto exchange might be well onto the path of exponential growth. This much-coveted license is issued by the Hong Kong Securities and Futures Commission, which means that OSL now gives crypto exposure to both retail and institutions. The exchange recently touted its status as the world’s ‘first SFC-licensed, listed, digital asset wallet-insured, Big-4 audited digital asset trading platform for institutions and professional investors.’

Going by such fundaments, Fidelity’s capital scaling in Asia comes as no surprise; in fact, the firm recently invested in a Singapore regulated fund manager dubbed Stack Funds in a move that will enable investors to purchase and store crypto assets. Fidelity also launched a Europe based unit towards the end of last year; this particular entity was launched in the United Kingdom and will focus on extending Fidelity’s services to the larger European market.

Overall, Fidelity has had quite a good run in the crypto space; its CEO, Abigail Johnson, a crypto enthusiast, recently revealed that their custody operations have been ‘incredibly successful.’ Having launched its Bitcoin fund in early 2020, Fidelity targets investors who can invest a minimum of $100,000. Per the company’s latest updates, an estimated 36% of institutional investors have exposure to BTC or other crypto assets.

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Author: Edwin Munyui

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

Grayscale’s Record-Breaking Hat-trick, Q3 Inflows Rakes in Over $1 Billion in Investment

Q3 was the best quarter ever for Grayscale Investments, which serves institutional investors, family officers, and private investors.

The largest digital asset manager took in more than $1 billion in new investment in its largest-ever quarterly inflows, marking it the third-straight quarter when the asset manager broke its own record for inflows.

As per the firm’s report on Wednesday, Grayscale now has $5.9 billion in assets under management (AUM).

This growth came despite the global economy taking a nosedive in 2020, and the price of Bitcoin recording gains of only 18%.

Like every time, the leading digital asset remained the most popular cryptocurrency. Grayscale Bitcoin Trust (GBTC), the company’s largest product, saw $719.3 million in new inflows in Q3.

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The persistent demand for GBTC has the company becoming one of the fastest-growing investment products in the world. It is further increasing the appetite for Grayscale’s other products.

Ethereum saw a record growth with 17% of the investment in Grayscale Ethereum Trust (ETH) from new institutional investors.

This week, Grayscale announced that ETHE is now an SEC reporting company that helped in its price surge.

“We believe in a future where multiple digital assets coexist,” said Michael Sonnenshein, managing director at Grayscale Investments. “We believe that there is a future state where bitcoin, Ethereum, and other digital currencies coexist as part of the digital currency cohort” and are “used for different things,” he said.

Grayscale’s Bitcoin Cash, Litecoin, and Digital Large Cap products also saw over 10x growth in inflows quarter-over-quarter.

Interestingly, for the first time, Grayscale found that a majority of its investors, more than half at 57%, were investing at least two of its crypto investment products, up from 44% a year ago and 37% when the company was first launched in 2012.

More institutions are surely coming, which are not only the primary source of investment capital at 81% in Grayscale, but they also increased their average allocation to $2.9 million from the previous quarter’s $2.2 million.

What is more interesting than this “consistent and significant growth” is what has been behind it.

Besides the digital assets outperforming major indices YTD, investors are interested in them because of the ongoing stimulus concern. With more significant fiscal stimulus expected in Q4, “more investors may look to digital assets for yield in this paradigm of monetary inflation,” it says.

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Author: AnTy

Fidelity Head Launches New Bitcoin Index Fund; $100,000 Minimum Buy-In Price

One of the largest mutual funds in the U.S., Fidelity Investments, is enhancing its efforts in the Bitcoin and crypto space with its chief strategist, Peter Jubber, starting an institutional-grade and high net worth clients-focused BTC index.

According to a filing sent to the Securities Exchange Commission (SEC), Fidelity Investments has launched a new Bitcoin index fund, ‘Wise Origin Bitcoin Index Fund I, LP’ that targets high et worth investors and institutions. A $100,000 minimum buy-in value is required by the index fund following the demand by corporations and accredited investors on Wall Street on crypto investments.

The Wise Origin Bitcoin fund was launched by the head of strategy and planning at Fidelity Investments, Peter Jubber, in conjunction with the mutual fund’s brokerage and distribution divisions. The fund aims to provide a gateway for accredited investors on Wall Street to dip their feet into crypto.

Fidelity is known for its soft stance on crypto investing, owning stakes in crypto companies such as Canadian mining firm, 8Hut, and providing custodial services to institutions. Jubber, also a well-known enthusiast and evangelist of Bitcoin and blockchain, in 2017 said the firm was sketching out a decade long plan on the impacts and opportunities that blockchain technology offers to traditional finance.

Peter will lead the ‘Wise Origin Bitcoin Index Fund’ as the executive director and FD’s Fund’s president. Reports on Forbes also confirm that a Delaware based firm, FD Funds GP will become a general partner to Fidelity’s new BTC fund.

Fidelity’s reports on the cryptocurrency market this June showed that over 36% of big institutional investors were taking up digital assets, and another 80% of them stating they find crypto appealing. Moreover, a recent report by the mutual fund concluded there is an increasing interest in Bitcoin as a store of value with the world’s witnessing unprecedented fiscal and monetary policies.

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Author: Lujan Odera

Current Market Structure Reminiscent of Period Preceding Bitcoin’s Historic Bull Run: Grayscale

The gains in the crypto market have digital asset manager Grayscale Investments AUM jumping to $5.8 billion.

In its latest report titled “Valuing Bitcoin” written by Grayscale research director Phil Bonello, he points out that a plethora of blockchain metrics indicate that “the current market structure is reminiscent of early 2016, the period that preceded Bitcoin’s historic bull run.”

On the supply side, never has the current level of Bitcoin ever been owned for more than one year while exchange balances continue to be at their lowest levels since May 2019.

On the demand side, daily active addresses are at its highest level since 2017 with the mining profitability ratio stating it a good buying opportunity. Whale Index, that tracks the number of unique BTC addresses with balances over 1,000 Bitcoin is also near its ATH.

Additionally, in the current environment, Bitcoin has become even “more important than ever.”

In 2020, in order to prop the coronavirus pandemic battered economy, governments introduced ultra-loose monetary policies, printing money faster than ever – QE, and continued to increase the debt which has made the situation worse than 2008 Great Recession.

Source: Grayscale

In this environment, investors are now searching for ways to protect against an ever-expanding monetary supply, and Bitcoin’s limited supply which isn’t controlled by any authority makes it an attractive option. The report states,

“We believe demand for a scarce monetary asset like Bitcoin grows as global monetary inflation accelerates.”

Because bitcoin isn’t a cash-generating asset, traditional investors struggle to assign a fair value to it. As such, in many ways, it is similar to how gold is valued — relative valuation and supply/demand analysis.

In May this year, billionaire investor Paul Tudor Jones in his investment case for bitcoin, which he called an inflation hedge, suggested Bitcoin should have a far higher market capitalization than it currently has. Jones at that time wrote,

“Bitcoin had an overall score nearly 60% of that of financial assets but has a market cap that is 1/1200th of that. It scores 66% of gold as a store of value, but has a market cap that is 1/60th of gold’s outstanding value. Something appears wrong here and my guess is it is the price of Bitcoin.”

According to Grayscale, as the demand for the store of value grows during monetary inflation, Bitcoins’ unique quality of being scarce, makes it well-positioned to be a safe haven.

“Bitcoin continues to command global investor attention, there is scant supply to meet growing demand, and the infrastructure is now in place to satisfy that demand.”

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Author: AnTy

Grayscale Launches Second National TV Commercial to Drive Interest In Digital Assets

Grayscale Investments launches a new digital assets TV commercial ad across top stations on Monday aiming at onboarding no coiners onto the crypto bandwagon. The video, which has since been shared thousands of times across social media, raised different opinions across crypto Twitter similar to its previous #DropGold campaign.

The world’s first institutional-focused digital assets firm, Grayscale, launched its second digital assets ad campaign titled “History of Money” on Monday, following the successful “#DropGold” ad, launched in 2019. The new TV commercial is a half-minute explanation of the history and evolution of money from barter trade, to cowrie shells to Roman gold and copper coins and finally the more recent paper form of money and bonds.

While the ad, featured on CNBC, MSNBC, Fox, and Fox Business, promotes the move to digital assets as the next stage of money, Bitcoin (BTC) is not mentioned in the ad, as was the case in the #DropGold campaign. Instead, a list of digital assets on Grayscale’s Trust including BTC, BCH, ETH and XRP are listed as shown in the image below.

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Grayscale’s Digital Asset Trust options. (Image: Grayscale)

The institutional digital assets firm pitches the ad on their blog as:

“A wakeup call that people everywhere should seize what we feel is a once in a generation opportunity that digital currencies may present.”

Crypto journalist, Andrew Thurman, compares Grayscale’s latest ad to Charlie Merrill, a legendary banker known for his efforts to educate and advertise to the population in a bid to popularize the buying and trading of stocks and bonds.

In 1948, Merrill published one of the longest newspaper ads yet in the New York Times titled “‘What Everybody Ought To Know About This Stock and Bond Business”, to push adoption into equities. His gamble paid off. Could Grayscale’s latest ad play a massive role to push liquidity into the crypto markets as well as increase knowledge across ordinary populations and institutions in a similar manner?

Only time will tell. But so far the institution has grown its value of assets under management (AUM) to over $5 billion according to the recently released half year results.

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Author: Lujan Odera