Grayscale Investments Adds $180 Million Worth Of Bitcoin To Portfolio As Institutional Interest In Bitcoin Continues To Rise
Cryptocurrencies like Bitcoin promise a new era of transacting promising a trustless, decentralized and secure system. Naturally, the barrier to that new payment reality is getting enough people on board so that people can expect for currencies like Bitcoin to be accepted. For years the holy grail sign of adoption has been institutional investors and this week the crypto space has taken new strides towards adoption.
Grayscale Investments — a cryptocurrency investment firm long held to be a thermometer of institutional interest in crypto assets — this week added $180 million worth of Bitcoin to its portfolio, data from Bybt shows. The firm purchased 17,100 Bitcoin for its Bitcoin Trust bringing their total holdings to 449,900 coins under management which represents a whopping 2.4% of total Bitcoin in circulation.
The move comes at a time where institutional interest in Bitcoin has already been at an all-time-high following business intelligence firm Microstrategy’s move to make the cryptocurrency its primary reserve asset. Following the announcement, the company purchased $450 million worth of Bitcoin and its CEO Michael Saylor came out as a Bitcoin maximalist.
Microstrategy’s bold Bitcoin strategy ushered in a flurry of institutional interest with exchanges dominated by institutions including Bakkt and LMAX Digital began recording large spikes in activity. After Microstrategy’s announcement, LMAX Digital was processing $84 million per day and was ranked by Skew as the second largest BTC spot market behind Coinbase.
A survey from Fidelity Investments found that a third of institutional investors own digital assets like Bitcoin. Across the U.S. and Europe, 36% of the survey’s 774 respondents said they own cryptocurrencies or derivatives. In the U.S. the number of institutions reporting crypto asset holdings is up 22% from a year ago, indicating that mainstream adoption of crypto assets may be on the horizon. Another survey from State Street found that 38% of the company’s institutional clients plan to increase their allocation to digital assets in 2020.
Institutional investment in cryptocurrencies could help to usher in wider retail adoption, especially as a younger and more technology-savvy generation comes of age. Over the next 25 years research and consulting firm Cerulli Associates projects that as much as $68 trillion will transfer from Baby Boomers to the next generation, Blockchain.com highlighted in a recent Twitter thread.
Big banks have prepared for this transition by offering an expanded suite of digital banking. A 2018 survey by YouGov found that over 50% of American Millennials were interested in crypto, opening an opportunity to introduce curious young investors to digital assets whether in the form of tokenized products like gold or true cryptocurrencies like Bitcoin or Ethereum.
By Emily Mason