For a long time people waited in Bitcoin (BTC) and Crypto space for it and now it seems to be there: institutionalization. What is meant by this is that institutional investors such as hedge funds invest large sums in BTC in order to profit from its performance. For a long time this seemed to be rather wishful thinking of many BTC fans, because the Bullrun 2017 was almost exclusively caused by private investors. However, with the development of the crypto sector in the last 3 years a lot has happened.
Especially in the last weeks and months the corona crisis as well as the massive money printing of the central banks around the globe have become a catalyst for this development. The best example of this is the recent BTC News, where the well-known Wall Street hedge fund manager Paul Tudor Jones invested 1-2% of his fund’s capital in BTC through futures. Also recent figures from Grayscale Bitcoin Trust show that BTC seems to have become the preferred choice of investors.
BTC becomes accessible through Grayscale Trust
One of the main problems of the long-awaited institutionalisation was that the nature of BTC and the crypto-regulation made it difficult for most professional investors to invest in BTC.
Grayscale was one of the first companies to address this challenge and in 2013 established the Grayscale Bitcoin Trust where investors can buy shares in securities. Grayscale will then use the money to invest in BTC, allowing investors to participate in its performance through a traditional financial instrument. This possibility seems to appeal to many institutional investors.
BTC on the advance through Grayscale
Grayscale now manages assets of USD 3.2 billion through its BTC Trust, which represents almost 2% of BTC’s total market capitalisation. In recent years, the sums that institutional investors have invested quarterly have already multiplied.
Recent figures show that the corona crisis and the money printing by the central banks have fuelled this development massively and steered many investors into the arms of BTC Trust. This is because in the first quarter of 2020 an average of USD 30 million was invested weekly, which is an average of over USD 360 million in the last 3 months and a new record.
Within one year the average weekly investment volume has therefore increased tenfold and according to the statements of CEO Barry Silbert the rapid development will continue in the 2nd quarter of 2020.