Grayscale has established itself in a few years as the benchmark in terms of institutional exposure to Bitcoin. With its open-ended trust system, the asset manager was able to find a way around Securities and Exchange Commission (SEC) rules. Grayscale’s flagship product, the GBTC, is enjoying tremendous success. The fund currently holds 651,884 bitcoins, or about 3.10 percent of the total bitcoin supply. Of this amount, 50,000 will be released in the middle of the summer.
Grayscale falls to 34 billion in assets under management
According to the latest figures released by the asset manager, the company now has $34.4 billion in assets under management. This marks a significant drop in the amount of these assets. This decrease is largely due to the fall in the price of Bitcoin, which, remember, took the rest of the market with it.
Bitcoin is the main asset held by Grayscale. The US-based company now has 651,884 BTC under management worth $25 billion. Ethereum is the second most represented asset. The asset management company has over 3 million ETH under management with a total value of over $7 billion.
The amount of assets under management has changed little in the last few weeks, but their overall value has largely decreased. Indeed, Grayscale’s ETHs were worth almost $17 billion as of May 11, 2021 and their value has now been divided by 2. The same is true for its BTC.
Unlocking thousands of Grayscale bitcoins puts pressure on the price
From July 2020 to March 2021, Grayscale’s GBTCs were trading at a significant premium. This meant that the asset manager’s clients wishing to gain exposure to Bitcoin had to pay more than the market price. Nonetheless, the company is offering clients the opportunity to buy GBTC at the market price, but the assets will be locked in for 6 months before they are tradable.
From June 18, 2020 to February 18, 2021, Grayscale purchased 284,393 BTC. For context, this is equivalent to 127% of the bitcoins that were mined over the same period. And throughout this period, GBTC was trading at a premium.
Over the next few weeks, there will be a massive release of assets purchased at market value in early 2021. By the end of July, more than 50,000 GBTC will be unlocked and available for trading. This massive influx of liquidity will necessarily cause volatility and is likely to exert strong selling pressure.
Grayscale is considering new assets for its clients
Grayscale released a list of 13 assets added to its watch list on June 18. The 13 new assets under consideration are in addition to the 18 others the firm continues to investigate, meaning Grayscale is looking at a total of 31 investment products.
The 13 additional cryptoassets are 1inch (1INCH), Bancor (BNT), Curve (CRV), Internet Computer (ICP), Kava (KAVA), Kyber Network (KNC), Loopring (LRC), Near (NEAR), Polygon (MATIC), Ren (REN), Solana (SOL), Universal Market Access (UMA) and 0x (ZRX).
List of assets proposed by Grayscale and assets under consideration – Source: Coin98Analytics
Grayscale’s latest announcement comes just days after Morgan Stanley announced that it was ready to expand the Bitcoin fund options it offers. In March, it became the first major US bank to launch a cryptocurrency investment fund, nipping at Grayscale’s heels.