The bear market is not an obstacle for institutional investors. The Grayscale Fund, focused on the cryptocurrency market, revealed that in three quarters of 2018, investors have located here 330 million USD. Bitcoin invariably enjoys the greatest interest.
Intelligent investors are buying during the bear market, according to specialists from Grayscale, who recently released a quarterly report. It shows a record inflow of funds to instruments based on cryptocurrencies. The USD 81.1 million collected in the last three months is 13 million more than in the same period of the first year. In total, the company manages funds worth USD 1.5 billion, of which about 60% comes from institutional clients.
Michael Sonnenshein, Managing Director of Grayscale, says the crisis has given the opportunity to intelligent investors who want to buy Bitcoin in anticipation of the upcoming rally:
"Investors who became interested in the market after last year's rally use it as an opportunity to get involved for the first time." If they were interested when Bitcoin cost $ 17,000, they would definitely be even more interested in investing in Bitcoin for $ 6,000. " - Sonnenshein said.
Who makes the investment?
From USD 329.5 million, which were allocated to Grayscale investment products, for three quarters of 2018, 59% comes from institutional investors. While the total amount of new investments slightly decreased, the proportion of funds from institutions increased - up to 70% from the total amount of USD 81.1 million.
Although this information does not give 100% certainty about the change in the trend, a good signal is that in the end the BTC price did not fall below the support level at 6000 USD. Is it because the market has reached the stage of accumulation or is it because investors did not have enough time to think about the next step? For sure, we see a definite increase in interest and confidence in the cryptocurrency market on the part of the institution.
"Investing in cryptocurrencies has ceased to be a taboo subject among most investors, and when we talk to our clients who invest in hedge funds, we see that they have more and more knowledge." - Sonnenshein said.
Who makes the investment?
From USD 329.5 million, which were allocated to Grayscale investment products, for three quarters of 2018, 59% comes from institutional investors. While the total amount of new investments slightly decreased, the proportion of funds from institutions increased - up to 70% from the total amount of USD 81.1 million.
Although this information does not give 100% certainty about the change in the trend, a good signal is that in the end the BTC price did not fall below the support level at 6000 USD. Is it because the market has reached the stage of accumulation or is it because investors did not have enough time to think about the next step? For sure, we see a definite increase in interest and confidence in the cryptocurrency market on the part of the institution.
"Investing in cryptocurrencies has ceased to be a taboo subject among most investors, and when we talk to our clients who invest in hedge funds, we see that they have more and more knowledge." - Sonnenshein said.
Even retirement accounts are diversified into digital currencies - they account for 18% of the funds invested in Grayscale in the third quarter. Another group are individual investors, people with high incomes - they constitute 11% of new inflows to funds in this period. Geographically 64% of investors are US residents, and 34% of new funds came from other markets.
What do investors buy?
The most popular instrument offered by Grayscale is Bitcoin Investment Trust, which gives investors the benefits of owning Bitcoin, without the need for its "physical" storage. In the third quarter of 2018, as many as 73% of new funds were invested in this area. This indicates that Bitcoin is the cryptocurrency most willingly chosen by accredited investors, and only 27% prefer to invest in more risky assets from the altcoin market. The second most popular fund in the last three quarters was the Ethereum Classic Trust, and the third most-recently launched was the ZEN Investment Trust.