Grayscale To Conduct $3 Billion Crypto Transfer To Coinbase (#GotBitcoin?)
Today, digital asset management fund Grayscale Investments will transfer nearly $3 billion worth in cryptocurrency holdings to American major crypto wallet provider and exchange exchange Coinbase. Grayscale To Conduct $3 Billion Crypto Transfer To Coinbase (#GotBitcoin?)
Largest Single Crypto Transfer?
As Forbes reported on Aug. 2, Grayscale is going to move almost $3 billion worth of its digital currency holdings, including Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Litecoin (LTC), and Ripple (XRP), among some other tokens, to Coinbase, wherein Coinbase Custody will serve as custodian of the underlying assets for the company’s products.
Together with its cryptocurrency holdings, Grayscale will transfer its publicly quoted cryptocurrency trusts and its Grayscale Digital Large Cap Fund to Coinbase. The transfer will thus apparently be one of the largest single day transfers of crypto assets ever conducted.
Commenting on the deal, Sam McIngvale, Coinbase Custody chief executive, said:
“As a NY State-chartered trust company, Coinbase Custody is held to the same fiduciary standards as national banks. We also offer some of the broadest and deepest insurance coverage in the crypto industry.”
Hitting New Records
In mid-July, Grayscale recorded an all-time high volume of assets under management of $2.7 billion. In such a way, the figure marked a near tripling of assets under management by the company since the preceding quarter.
As previously reported, Grayscale Investments’ Bitcoin Trust was up almost 300% on the year as of July 9. At the time, the trust was yielding a 296% year-to-date appreciation — a stratospheric increase as compared to mainstream investments reflected in the S&P 500 (18.7%) and Global Dow (12.9%) over the same time period.
Coinbase Custody revealed in June that it held $1.3 billion in assets under custody and the firm expected to hit $2 billion AUC soon.
Grayscale: Institutional Interest In Crypto Doubles In Q2 A senior executive at cryptocurrency asset management giant Grayscale has stated that institutional investors are constantly piling into the space in 2019.
Grayscale says institutions were always active
Speaking in an interview with news outlet The Block on Oct. 8, the company’s director of sales and business development Rayhaneh Sharif-Askary said that business had been consistent while growing throughout this year.
Q2 alone saw $85 million come from investors — twice as much as in Q1 — with institutional investors contributing more than 80% in total. Sharif-Askary explained:
“You know, it’s really funny, I get asked this a lot – there’s this rhetoric in the media about when are institutional investors going to get involved, when are they going to start investing, and it’s so funny because it’s ironic. We see institutional investors invest with us all the time and that’s been the case for a long time now.”
Investors Are Comfortable With Altcoins Again
These comments contrast with the general industry sentiment on institutional interest since trading platform Bakkt’s disappointing launch in September.
Since then, many have assumed that institutions will be deterred from Bitcoin (BTC) for the time being as various data sources highlighted that publicity around institutional involvement is hitting lows in recent weeks.
Sharif-Askary meanwhile noted that investment activity disregards price suppression. In Q2, around 25% of total inflows targeted altcoins, she revealed, adding that it was “great to see that diversification” across different assets.
Grayscale currently offers trusts for nine cryptocurrencies, including Ether (ETH), Bitcoin Cash (BCH) and Litecoin (LTC) in addition to Bitcoin itself.
Grayscale Files Form To Become First Bitcoin Fund To Report To SEC
Publicly traded Bitcoin (BTC) fund Grayscale Bitcoin Trust (GBTC) filed Form 10 with the United States Securities and Exchange Commission (SEC) to become the first crypto fund to report to regulator.
Grayscale announced in a blog post published on Nov. 19 that, if the filing will be deemed effective by the SEC, several aspects of the fund’s operations could change.
In The Event of Approval
The firm notes that, if the regulator deems the filing effective, the structure of the trust will remain the same and it will not be added to a national securities exchange. However, there will be some changes to Grayscale’s scope and operations.
Should the SEC accept Grayscale’s filing, it would designate the fund as an SEC reporting company and obligate it to register its shares under the Exchange Act. Furthermore, as many institutions block investors from considering trusts based on SEC-approval, Grayscale’s eligible investor audience could widen. The SEC’s auditing standards would also be applied to Grayscale.
The firm also noted that accredited investors will benefit if the filing is approved:
“Accredited investors who have previously purchased shares in the Trust’s private placement would have an earlier liquidity opportunity, as the statutory holding period of their private placement shares would be reduced from 12 to 6 months.”
Grayscale is not the only fund seeking to give investors easy exposure to Bitcoin. As Cointelegraph reported in September, investment management firm VanEck also launched its own Bitcoin trust, and issued just four Bitcoins during the first week of operation.
Grayscale sees record inflow
Grayscale’s regulatory foray follows a record year for the trust, which saw inflows of $254 million in total investment into its products in the third quarter of 2019. Q3 2019 marked the highest demand for the company’s offerings since its establishment, making a threefold quarter-on-quarter increase from $84.8 million in Q2 2019.
Now Reporting To The Sec, Grayscale Bitcoin Trust One Step Closer To Public Trading
Grayscale’s Bitcoin Trust now reports to the United States Securities and Exchange Commission (SEC), putting it one step closer to public trading.
Grayscale’s Bitcoin Trust manages investment in Bitcoin on behalf of investors, exposing them to the coin’s potential for gains while mitigating risks. The Jan. 21 announcement advertises the trust as the first of its kind to report to the SEC.
Grayscale’s full Form 10 is available here. Subsequent to this registration, the trust will need to file quarterly and annual reports with the SEC, which will then become publicly available. In response to an inquiry from Cointelegraph, Grayscale declined to specify just when it will file the first of these reports but said the firm will do so in accordance with SEC regulations.
While a Form 10 filing is not enough for a company to begin trading publicly on exchanges, it is a step in that direction and opens the trust up to more investors than were previously available without registration.
In the announcement, the firm makes particular mention of accredited investors — a controversial designation. Owning or purchasing shares from the Trust’s private placement gives them the advantage of quicker liquidity with a reduced holding period of 6 months.
Grayscale’s announcement arrives as the SEC considers changes to its accredited investor designation, couched in the 1934 act’s Section 12(g).
Effectively, the SEC trusts the wealthy or executive class to invest with insight and thereby minimal risk. Conversely, the Main Street investor, the decades-old moniker assumes, lacks this insight. Under SEC exemptions companies may offer shares to accredited investors without filing all documents that the SEC requires of publicly-listed companies. Critics castigate this exemption as favorable to the rich while being exclusionary of everyday investors, whom former SEC commissioner Michael Piwowar dubbed “forgotten investors.”
Bitcoin Has ‘Solidified Role’ As Investors’ Digital Gold — Grayscale
Bitcoin (BTC) has “solidified” its role in the world economy as both a store of value and “digital gold,” the head of the world’s largest BTC fund has said.
Speaking in an interview with financial news magazine The Compound on March. 2, Michael Sonnenschein, managing director of Grayscale Investments, said Bitcoin was in a new investment era.
Grayscale: institutions think BTC is a “flight to safety”
In complete contrast to even two years ago, in 2020, institutional investors consider it necessary to have the cryptocurrency in their portfolios.
“Bitcoin itself has solidified its role as a store of value or as a digital gold,” he said.
“So I talk to an institution, they now look at Bitcoin as part of the same flight to safety as they might look at bonds or gold or other things that have served in that capacity for them, and that wasn’t a widely-held narrative probably until about the last 12 or 18 months.”
In 2019, Grayscale’s Bitcoin Investment Trust (GBTC) was the second most liquid over-the-counter, or OTC, market. As Cointelegraph reported, the company’s fortunes have gone from strength to strength as investors increasingly focus their attention on regulated Bitcoin products.
The company’s Bitcoin assets under management currently involve around 1.5% of all the Bitcoin in existence, or $3 billion.
Grayscale became a reporting company with United States regulator, the Securities and Exchange Commission (SEC), in January, and Sonnenschein believes the tide is gradually turning in favor of crypto businesses engaged in compliant activities.
The SEC approving a Bitcoin exchange-traded fund, or ETF, for example, is “a matter of ‘when,’ not ‘if,’” he forecast.
A Window For Altcoins?
“There is ever-growing evidence that this asset class is not going away — investors want access to it, and if the legacy institutions want to remain competitive, they’re going to have to open the door to this asset class for their clients.”
With Grayscale offering a total of ten crypto funds, he nonetheless shied away from privileging Bitcoin over altcoins.
Controversial Bitcoin Cash (BCH), he argued, was simply trying to solve other problems to Bitcoin itself.
“Over time, we don’t know who will be the winner,” he said.
Grayscale Accumulates 34% of New BTC As Weekly Investments Tag $30 Million
Crypto fund manager Grayscale Investments is believed to have purchased one-third of new Bitcoin for three months.
Grayscale Investments, a crypto investment fund manager and subsidiary of Barry Silbert’s Digital Currency Group, is estimated to have purchased up to one-third of all newly minted Bitcoin during the past three months amid the run-up to the block reward halving.
The announcement comes as average weekly investments into Grayscale’s Bitcoin Investment Trust, or BIT, reached $29.9 million over the first quarter of 2020.
In response to a tweet publicizing the figures, Grayscale founder Barry Silbert stated: “just wait until you see Q2.”
The average weekly investment into the trust has increased by over 800% when compared to Q1 2019’s $3.2 million.
Grayscale Investments Absorbs 34% Of New BTC
On May 19, Redditor “parakite” posted estimates indicating that Grayscale has spent the past three months accumulating up to one-third of all freshly mined Bitcoin (BTC).
The purchases added 60,762 BTC to its Bitcoin Relief Fund — equating to a rate of 607 Bitcoins over 100 days.
As of May 17, the fund was believed to be holding 343,954 BTC in total — a 21% increase in three months.
BIT Assets Under Management Up 80% In One Year Had Reached $3.8
On May 19, Grayscale announced that the value of its assets under management had reached $3.8 billion, up from $2.1 billion as of May 2019.
The data also revealed that the firm’s Ethereum Trust has emerged as Grayscale’s second-largest, representing nearly $290 million.
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