Institutions Rush to Bitcoin, Grayscale’s Record-Breaking Q3

Key Takeaways

  • Grayscale Investments announced its best-ever quarterly report, with a record-breaking $1.05 billion flowing into its cryptocurrency investment products.
  • Grayscale Bitcoin Trust (GBTC) was the best performing product for Grayscale, with inflows of $720 million since last quarter.
  • Grayscale’s assets under management reached all-time highs during Q3 of 2020 for all its products, growing from $2.0 billion to $5.9 billion.

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Between July to September, Grayscale saw $1.05 billion going into its investment products, the bulk of which went into Bitcoin. This was the third consecutive record-breaking quarter for the company.

Grayscale Investments, the world’s largest digital asset management company, released its Q3 investment report showcasing another exceptional quarter for institutional interest in Bitcoin.

The report’s highlight is that Q3 of 2020 was the most successful quarter in Grayscale’s history. During the period, Grayscale saw $1.05 billion going into its cryptocurrency investment products. This was the largest money inflow recorded by the company in a single quarter since its inception.

Grayscale’s Bitcoin Trust Breaks Records

Among all of its products, Grayscale Bitcoin Trust brought in the most funds and witnessed an inflow of about $720 million in the last quarter.  

GBTC also proved to be the best performing product for Grayscale in terms of assets under management, going from $1.9 billion to $4.8 billion year-to-date. This shows that appetite for Bitcoin remained high among investors this quarter.

Grayscale quarterly inflows since inception with Bitcoin, Ethereum, and altcoins. Bar chart
Source: Grayscale

Grayscale further detailed that the demand for other investment products increased, with capital inflows of 31% into products other than Grayscale Bitcoin Trust. These inflows show that investors are also bullish on altcoins.

Among alternative products, investors had the highest appetite for Grayscale Bitcoin Cash Trust (BCHG), Grayscale Litecoin Trust (LTCN), and Grayscale Digital Large Cap Fund (GDLC), according to the report.

Financial Institutions Want Cryptocurrency

Grayscale reported that more than 80% of investments into its products came from institutional investors during the quarter. Here, it was the hedge funds that dominated institutional investments.

The report also mentioned that year-to-date capital inflows into its products exceeded $2.4 billion, which is more than double the $1.2 billion in investment funds it secured for its products between 2013-2019.

Yet another point is the astounding rise of Grayscale’s assets under management in the last quarter. AUM for all products reached an all-time high in Q3, growing from $2.0 billion to $5.9 billion⁠, representing a 195% rise.  

Continued growth in Grayscale’s cryptocurrency investment products could indicate what’s to come for the rest of the market.

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