Grayscale Bitcoin Trust adds nearly $200M Bitcoin

Grayscale Investments, the world’s largest digital asset management firm, has purchased another 17,100 Bitcoins for its tradable trust.

Data available on cryptocurrency derivative data website Bybt reveals that from Sept. 22 to Sept. 25, Grayscale Investments increased the number of its bitcoin positions from 432,800 BTC to 449,900 BTC. This translates to a 17,100 BTC purchase—worth $186 million at press time—in just two days, a testimony to the renewed bullish sentiment towards the so-called digital gold.

Institutional interest in Bitcoin grows

The firm buys coins for its investors, so that they can get exposure to crypto assets without engaging in the logistical  and legal challenges of holding them directly themselves. As Grayscale’s trusts are traded on over-the-counter markets, the growth in its assets under management can be directly linked to renewed institutional investor’s interest in Bitcoin and other cryptocurrencies.

Professional trader and market analyst Il Professore told Modern Consensus that he believes renewed interest in Bitcoin from institutional investors is unsurprising. He explained that market analysts and traders who base their decisions on trend analysis and temporal cycles have been expecting the recent Bitcoin’s price downward movement to be just a short-term correction. He said:

“Bitcoin’s longer-term upward trend also remained unchanged during the March correction. Major investors try to optimize their accumulation of Bitcoin when they see new highs by selling their positions and buying again at lower prices.”

In a tweet he published today, Il Professore also suggested that Bitcoin’s “correction phase has come to an end.” He explained that with a consolidation of the coin’s price above $10,680 he believes the short-term trend to be bullish once again.

Grayscale Investments released an update concerning its holding in a tweet sent on Sept. 25, according to which its Bitcoin Trust includes now nearly $4.8 billion worth of bitcoin. On the other hand, the Grayscale Ethereum Trust has nearly $784 million worth of assets under management, while the Bitcoin Cash Trust about $36 million.

Adding up the assets backing all the 10 tradeable trusts managed by the company, this boils down to Grayscale Investments having $5.8 billion of total assets under management.

This interest in Grayscale trusts suggests that interest in cryptocurrencies as an investment is growing among more sophisticated institutional investors. Which is probably good news for the less sophisticated investors who are also moving into bitcoin, according to a new report from the Bank of Canada. 

As Modern Consensus recently reported, a new paper from the central bank revealed that less “financially literate” investors were twice as likely to own cryptocurrencies as their more knowledgable counterparts. It added that “awareness of Bitcoin increased with financial literacy, but the likelihood of ownership declined as the level of financial literacy increased.”

Updated Oct. 5 at 1:17 p.m. to correct spelling of Grayscale.