According to Grayscale, the latest entrants into the world of Bitcoin are pension funds
According to CEO Michael Sonnenshein, pension funds are accelerating the growth of Grayscale’s investment products.
Grayscale’s new CEO Michael Sonnenshein told Bloomberg that pension funds and financial endowments are actively investing in his company’s products:
„We’ve started to see active participation not just from hedge funds, which have been there for some time, but also from other institutions, pensions and insurance companies. […] The size of their allocations is also growing rapidly.“
Grayscale has long been at the forefront of large mainstream players that have decided to buy significant amounts of Bitcoin (BTC), so much so that it currently holds by BitQT around 3% of all BTC in circulation. The company continues to accumulate large positions in the digital asset as more and more institutional investors seek exposure to Bitcoin.
Its total Assets Under Management (AUM) exceeded $27 billion across 10 different products. The Grayscale Bitcoin Trust remains by far the most popular product, with over $23 billion in AUM. Grayscale’s Ethereum Trust is currently valued at about $3.6 billion, while its Digital Large Cap Fund holds nearly $339 million.
Total AUM: $27.4 billion
Total AUM: $27.4 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/Z3Q1EZXGeg
– Grayscale (@Grayscale) January 7, 2021
Pension funds are also following the trend with many institutional buyers entering the Bitcoin market in 2020. A survey conducted by Fidelity Investments last year revealed that 36% of financial institutions in the US and Europe own cryptocurrencies or derivatives. More than a quarter of respondents said they owned Bitcoin, while 11% said they held Ether (ETH).
According to Grayscale, the influx of institutional capital into crypto and Bitcoin is intensifying, with pension funds and financial endowments the latest entrants to the market.
Grayscale’s aggressive BTC buying policy is probably contributing to the rapid appreciation of the leading cryptocurrency. As more and more Bitcoins are bought, the asset, already characterised by inherent scarcity, is becoming even harder to come by. Sonnenshein explained:
‚This is an asset whose scarcity is verifiable: when there are market mechanisms in place that take it out of circulation, that inherently makes it an even scarcer asset.