Grayscale, the world’s leading digital asset management company, says a record-breaking $1.05 billion worth of investments flowed into its family of digital products in Q3 2020.
This is the firm’s third consecutive record-breaking quarter and surpasses Grayscale’s previous high of $906 million in Q2.
“Grayscale’s assets under management reached all-time highs during 3Q20, a broad reflection of investment interest in the digital currency asset class. YTD, Grayscale’s AUM increased from $2.0 billion to $5.9 billion, a rise of approximately 195%.”
In 2020, investments into Grayscale have doubled from the $1.2 billion that was invested between 2013 and 2019 to $2.4 billion.
Since its inception in September of 2013, cumulative inflow across Grayscale’s products now totals $3.6 billion. Specifically, investments into the firm’s flagship Grayscale Bitcoin Trust records the fastest growth, bringing inflows of $719.3 million between July and September, or an average of $55.3 million per week. The Trust has seen its AUM rise from $1.9 billion to $4.7 billion YTD.
Bitcoin continues to be the most attractive asset to investors and the fastest growing among Grayscale’s products, however, Grayscale says demand for alternative products records the most significant growth.
“While Bitcoin continues to be a major part of Grayscale investor allocations, the most notable uptick in growth comes from products that hold alternative assets. Products excluding Bitcoin accounted for 31% of inflows during 3Q20.”
The firm brought in an average of $80.5 million per week in Q3. Together, Grayscale’s altcoin products, which include the Grayscale Ethereum Trust, Grayscale XRP Trust, Grayscale Bitcoin Cash Trust, Grayscale Litecoin Trust, Grayscale Ethereum Classic Trust, Grayscale Zcash Trust, Grayscale Horizen Trust and Grayscale Digital Large Cap Fund brought in a weekly inflow of $25.2 million. That’s an increase of more than 1,400% quarter-on-quarter, Grayscale says.
In addition, Grayscale notes that the Ethereum Trust now holds 13% of the total inflows, 17% of which comes from institutional demand.
Institutional investors (i.e hedge funds) accounted for 84% of the total investment inflows, according to Grayscale. This quarterly surge of institutional investments into Grayscale’s products may be credited to the consistent performance of its family of products against major indices, Grayscale says.
“In 3Q20, Grayscale’s family of products significantly outperformed major indices even when taking into account fees, expenses, and other costs associated with the funds. The surge in inflows to Grayscale’s products may be related to the continued outperformance of digital assets, making them more difficult to ignore as a potential portfolio enhancer.”
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