Grayscale Investments has published its quarterly report with an assessment of the last months of 2020. According to the report, the year ended well for them, with investment inflows exceeding $ 5.7 billion.
Fourfold increase in investment
The fourth quarter of 2020 was a success for Grayscale: in just one quarter, investments of $3.3 billion were recorded. Demand from institutional investors was the main tone of 2020 and contributed to an increase in inflows. 93% of the trust fund’s investments came from institutional investors, with the largest support coming from asset managers.
Grayscale’s most popular investment product is its Bitcoin Trust at Grayscale, which had an average weekly inflow of $217.1 million in the last quarter of 2020. Ethereum Trust was the second most popular investment option with an average weekly inflow of $26.3 million.
Barry Silbert, founder and CEO of Digital Currency Group, Grayscale’s parent company, commented on the trust’s significant growth. According to the CEO, the history of fundraising at Grayscale is as follows:
- 2015: $3 million
- 2016: $20 million
- 2017: $ 120 million
- 2018: $ 360 million
- 2019: $608 million
- 2020: $ 5.7 billion.
For investors who want to secure their funds with a diversified portfolio, Grayscale also offers a Digital Cap Fund.
Grayscale recently decided to remove XRP from the basket of assets it offers, allocating most of the fund to Bitcoin( BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
Has Bitcoin really secured a reputation as a safe hedge?
Bitcoin investments largely gained popularity in 2020 as institutional players embraced the mainstream cryptocurrency. However, there is a growing consensus among institutional investors that Bitcoin is a reliable means of saving, and not everyone is yet convinced of this.
Banking giant Wells Fargo named Bitcoin as this year’s leading major asset, but it also called it a “speculative” investment. In its report, Wells Fargo compared cryptocurrency investments to the early days of the gold rush of the 1850s.
Regardless of how everyone looks at Bitcoin, there is definitely a shift in attitudes towards the asset at the moment.Bitcoin is now seen as a way to diversify your investment portfolio. According to Coinshares chairman Danny Masters, Bitcoin has quickly evolved from a dangerous asset to a career risk for asset managers when they are not holding BTC.
Bitcoin’s correlation with the US Dollar falls to a historic low
Without a doubt, the US dollar (USD) has suffered from the current surge in BTC. Studies show that both assets have an inverse relationship. This is evidenced by the fact that when BTC soared by more than 295% at the end of 2020, the USD index (DXY) fell to a 32-month low.
Market analyst Mati Greenspan found that the correlation between the Cue Ball and the USD fell to the lowest value in history – minus 0.15. He admitted:
“According to Coinmetrics, the correlation between these two assets is now -0.15, which is the lowest in history. The inverse correlation is still small, but the trend is clear. This is what happens when Bitcoin flies for 6 months in a row, and the dollar falls like a stone”.