Earlier this week digital assets manager Grayscale purchased a massive amount of cryptocurrency in a single day. On Monday alone, they bought 16,244 Bitcoin for a total of roughly $600 million.
To put that into perspective, that equals 18 times the number of new Bitcoin mined daily.
This gives me some real Hungry Hungry Hippos vibes_
Why this matters_
As an investor, you have two basic pathways towards adding assets (like stocks or cryptocurrencies) to your portfolio. You can:
- buy them directly, or
- buy an investment vehicle (like a mutual fund or ETF) that purchases assets on behalf of investors
Cryptocurrency mutual funds and ETFs do not currently exist. Until they do, Grayscale’s Investment products such as Grayscale Bitcoin Trust (OTC:GBTC) are bridging the gap, allowing (accredited) investors to gain exposure to these assets without having to buy them directly.
This aggressive crypto purchasing activity suggests a high demand from its clients (institutional investors, largely), for exposure to cryptocurrencies. Grayscale assets under management grew 900% in 2020.
Takeaways_
- Grayscale provides accredited investors with diversified exposure to the cryptocurrency asset class
- Their accelerated purchasing activity highlights an upward trend of institutional demand for crypto
- Grayscale’s investment products are only available to accredited investors, so if you are a regular civilian, you need to stick to buying assets directly
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