Grayscale Crypto Ownership Sees 900% Surge

Grayscale Investments has released its Q4 report for 2020, stating that since early 2020 its crypto ownership has skyrocketed a whopping 900 percent and, in the last quarter, it acquired $3.26 billion in crypto assets.

Institutional demand for crypto drives 900 percent surge

In a phone conversation with CNBC, the new Grayscale CEO, Michael Sonnenshein, stated that acquiring digital assets does not bear professional risks any more. It is far riskier for one's career to not acquire digital assets, he added.

The growing institutional demand in 2020, multiplied by the quantitative easing programs set up by almost-former president Trump and the Fed—in which well over $6 trillion in helicopter cash were printed—drove Bitcoin to its $42,000 all-time high on Jan. 8 of this year.

In the course of 2020, inflows from financial institutions into Grayscale Bitcoin Trust and trusts working with other major cryptocurrencies, saw an overall surge by 900 percent.

If 2020 started with $2 billion, by January 13, 2021, the total amount AUM equaled $24.7 billion, an average weekly amount of $251 million in investments.

A total of $3.26 billion came in only in the last quarter of 2020.

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"Meaningful acceleration of institutional participation"

Sonnenshein also shared that the participation of institutional investors surged as top asset managers warmed up to Bitcoin and other crypto assets, along with billionaires like Paul Tudor Jones and Ben Miller.

The share of the capital brought in by financial institutions equaled 87 percent for the entirety of 2020.

In Q3, those investors brought in an average of $3 million and, by the end of 2020, this sum grew to $6.8 million.

Bitcoin's perpetual opponent, JP Morgan, admitted that Bitcoin has good chances of existing as the digital analogue of gold.

Goldman Sachs analysts also shared their view that Bitcoin and gold can coexist without Bitcoin cannibalizing gold's market share.

However, a surge of fund outflows from gold into Bitcoin was largely observed in 2020.