The leading digital asset manager Grayscale continues to tighten its grip on the bitcoin supply. According to recent estimations, the company now owns over 3% of all the 21 million BTC that will ever exist.
Launched in 2013, Grayscale is the largest cryptocurrency asset manager with over $27 billion in assets under management.
Somewhat expectedly, the company’s Bitcoin Trust (GBTC) is the most popular product that enables institutions to receive BTC exposure through a publicly-traded trust that reports to the US Securities and Exchange Commission (SEC).
Investors typically pay a premium to avoid worrying about storing and managing the assets.
GBTC’s popularity exploded in the past year as institutions have been more eager to join the space. Grayscale reported that its AUM skyrocketed by 10x in 2020. Moreover, the firm garnered more inflows in Q4 2020 alone than in 2013-2019 combined, and BTC has been on the forefront.
Investors allocating funds in GBTC buy shares in a trust, which Grayscale backs by owning bitcoins. And, the company has been purchasing massive amounts of BTC in the past year to keep up with the skyrocketing demand.
The asset manager wrote in its Q4 2020 report that “while the supply of newly-created Bitcoin has slowed as result of the halving in May 2020, the inflows into Grayscale have accelerated meaningfully.” In fact, the firm said it bought nearly two times as many bitcoins as mined since the halving.
Recent reports exemplified Grayscale’s BTC shopping spree. The monitoring resource Bloqport said that the asset manager had bought 16,244 BTC in the span of 24 hours. To put this considerable amount in USD perspective – it’s nearly $600 million.
Ultimately, Bloqport noted that Grayscale’s bitcoins under management is 3% of all BTC ever to exist. Company data confirmed this.
According to Grayscale’s website, GBTC has 666,675,200 outstanding shares with 0.00094919 BTC per share. Simple math shows that this amount equals 643,801 bitcoins – this is 3.013% of the total supply of 21 million. Moreover, it’s actually 3.40% of all 18,604,000 bitcoins in circulation as of writing these lines.
Analysts from the giant US multinational investment bank, JPMorgan Chase & Co, have repeatedly emphasized the significance of the Grayscale Bitcoin Trust on the asset’s performance and adoption.
In its latest report, the strategists said that the cryptocurrency needs to overcome $40,000 to avoid a correction, which could drive institutions away from investing in GBTC.
Furthermore, they noted that the Trust has to sustain at least $100 million per day pace over the next few weeks to prevent such retracement.