Home > News > Grayscale‌ ‌reports‌ ‌$3.3‌ ‌billion‌ ‌worth‌ ‌of‌ ‌crypto‌ ‌investments‌ ‌in‌ ‌ Q4‌ ‌2020‌

Grayscale‌ ‌reports‌ ‌$3.3‌ ‌billion‌ ‌worth‌ ‌of‌ ‌crypto‌ ‌investments‌ ‌in‌ ‌ Q4‌ ‌2020‌

Hassan Maishera
Grayscale logo on smartphone, placed on dollar bills

Grayscale recorded over $3 billion investment in its cryptocurrency products during the fourth quarter of 2020

Institutional investors continue to enter the cryptocurrency market with billions of dollars. This is evident in Grayscale’s fourth-quarter 2020 report, which shows that the firm’s cryptocurrency products gained over $3 billion investment during the period.

According to the fourth-quarter report, Grayscale revealed that the total Q4 investment into Grayscale crypto products was $3.3 billion. This averages $250.7 million weekly. As usual, Bitcoin took the lion’s share of the weekly investment. The report shows Bitcoin’s weekly investment was $217.1 million, with Ethereum scoring a distant third place at $26.3 million.

The Grayscale Digital Large Cap Fund had an average weekly investment of $1.6 million. Meanwhile, the Grayscale Products ex Bitcoin Trust was higher than that of Ethereum, recording a $33.6 million weekly investment.

Overall, 2020 was an excellent year for Grayscale as the investment firm raked in nearly $6 billion from investors. Total investment into Grayscale products was $5.7 billion, with an average weekly investment of $109.8 million. Bitcoin was the dominant investment class, averaging $90 million weekly.

Institutional investors take the lead

According to Grayscale, 93% of the investment came from institutional investors. This represents an annual increase of 9%.  Asset managers accounted for the largest share, Grayscale added. The $5.7 billion investment into Grayscale products was four times the cumulative inflow the company received between 2013 and 2019. Hence, indicating that institutional investments in cryptocurrencies took a whole new level in 2020.

“The average commitment among institutions is also growing at a significant pace. The average commitment from institutions was $6.8 million, up from an average of $2.9 million in 3Q20”, Grayscale mentioned.

The surge in cryptocurrency investment saw Grayscale’s total asset under management (AUM) skyrocket in 2020. The report stated that “Grayscale began the year with $2.0 billion in assets under management and ended 2020 with $20.2 billion. In 2020, Grayscale Bitcoin Trust was among the fastest-growing investment products in the world, growing from $1.8 billion to $17.5 billion AUM. This is an incredible testament to the maturation of the digital currency ecosystem”.

Grayscale’s data shows a turning point for Bitcoin last year, with institutional investors viewing the cryptocurrency as a long-term store of value and an inflationary hedge. The surge in institutional investments, coupled with other factors, helped Bitcoin set a new all-time high price above $42,000.

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