New Report from Grayscale: Digital Asset Fund Adds $905 Million in Record Quarter

Grayscale Investments has just released its quarterly report showing that institutional demand for Bitcoin and other digital assets continues to rise despite the lack of action on the Bitcoin price (BTC). The report shows that Grayscale had another record quarter for its digital asset products with USD 905.8 million invested during that time period.

The nearly $1 billion inflow means that Grayscale nearly doubled its previous peak of $503.7 in Q1 2020. Of the total amount of funds accumulated by Grayscale, Bitcoin continued to lead the pack with 82.92% or USD 751.1 million invested in the Grayscale Bitcoin Trust (GBTC).

Tesla ‚is eating Bitcoin’s lunch‘ when BTC’s realized volatility reaches a 3-year low

Institutional investors lead the charge
Institutional investors continue to be the leading demographic of Grayscale’s digital asset trusts. They currently represent 84% of investment in the second quarter of 2020.

However, Grayscale experienced a significant increase in new investors who represented 57% of the investor base at Grayscale during the quarter.

While the percentage of new investors has increased, they accounted for only $124.1 million of the digital asset product revenue at Grayscale.

Grayscale’s Ethereum Trust is marketed at a premium of 515%
New Grayscale Investors Q2 2020

Institutions are jumping into the fray
While new investors represented a large percentage of the investment that went into Grayscale’s products, returning institutional investors also expanded into other assets. This is probably due to the record low volatility currently seen in the price of Bitcoin.

The data says that people are trading more with Ether and less with Bitcoin
Currently, about 81% of investors have diversified their portfolio into alternative digital assets. The report says:

„While long volatility was the winning trade in Q1 2020, volatility was moderate in Q2 as risky assets steadily recovered. In Q2, digital assets outperformed most indices, with Zcash, Ethereum and Stellar leading the way with returns of 72 percent, 62 percent and 62 percent, respectively.

The Ether de Grayscale Trust (ETHE) has seen a significant increase in inflows, receiving a record investment of $135.2 million this quarter.

This represents about 15% of the total inflow into Grayscale’s investment products, which may be the highest premiums in ETHE and the arbitrage opportunity it creates for institutions and accredited investors. The data also shows that while Immediate Edge volumes have declined, Ether volumes have increased.

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