Bitcoin’s price isn’t the only thing getting larger in the cryptocurrency space. According to reports, the institutional presence in the space is expanding as well. Grayscale Investments, a crypto management service that handles accounts primarily for institutional investors, recently announced that the digital assets it’s overseeing grew by a whopping $300 million in a single day.
Grayscale Sees Its Assets Expand
The company’s CEO Barry Silbert expressed the news in a tweet, claiming that as of October 22, there was an expansion of the total value of crypto assets under Grayscale’s management cloak to roughly $7.3 billion, a new record for the company. In addition, the Grayscale Bitcoin Trust saw a nearly four percent boost in total assets, bringing the amount of bitcoin under the company’s management to just over $6 billion.
2020 has been the year for institutions, and this is extraordinary news given how shaky the year has been in many ways. The coronavirus pandemic, for example, brought down the price of bitcoin from around $10,000 (it initially hit five-figure territory in mid-February) to just under $4,000 in March. That’s a loss of roughly $6,000 in just a few weeks.
It seems like this would have ultimately turned institutions off from bitcoin for good, given that the volatility everyone had been talking about for years had shown itself in its biggest form yet. However, it didn’t take long for bitcoin to recover. The world’s number one digital currency by market cap shot up to about $9,000 by the time May arrived, and two months later, the currency was once again trading beyond the $10,000 line.
This was a testament to bitcoin’s newfound strength and resilience, and perhaps it was the exhibition of this strength that showed institutions could be trusted. Over the summer of this year, it was announced that the second quarter for Grayscale had been a huge one, with the amount of bitcoin added under its management services moving past the $1 billion mark.
That means that customers had to deposit more than $300 million each month for a period of three months. To put things plainly, that’s a lot of bitcoin for such a short amount of time.
It’s Been a Great Time for Institutions
From there, other institutions began to show love for bitcoin, with the likes of MicroStrategy, Square and Stone Ridge buying massive bunches of the digital asset. In addition, Mode Global Holdings announced that it would be converting roughly ten percent of its total assets into bitcoin. Now that the transfer is complete, it’s estimated that the company holds a minimum of $1 million in BTC.
While this may not be as much as the latter companies, one can see that a trend is being followed. Institutions are coming to appreciate bitcoin as a store of value, and so long as this behavior continues, the currency is likely to continue moving up the financial ladder.