As part of our weekend analyses, here are Grayscale's Q4 2020 Investment Highlights:
- Total Investment into Grayscale Products:
- Average Weekly Investment – All Products: $250.7 million
- Average Weekly Investment – Grayscale® Bitcoin Trust: $217.1 million
- Average Weekly Investment – Grayscale® Ethereum Trust: $26.3 million
- Average Weekly Investment – Grayscale® Digital Large Cap Fund: $1.6 million
- Average Weekly Investment – Grayscale Products excluding Bitcoin Trust3: $33.6 million
- Majority of investment (93%) came from institutional investors, dominated by asset managers
Year Ended 2020 (“YE20”) Highlights4
- Total Investment into Grayscale Products:
- Average Weekly Investment – All Products: $109.8 million
- Average Weekly Investment – Grayscale Bitcoin Trust: $90.0 million
- Average Weekly Investment – Grayscale Ethereum Trust: $15.2 million
- Average Weekly Investment – Grayscale Digital Large Cap Fund: $1.4 million
- Average Weekly Investment – Grayscale Products ex Bitcoin Trust5: $19.8 million
- Majority of investment (86%) came from institutional investors, dominated by asset managers.
Biggest Takeaways
$20 Billion Dollar AUM: Grayscale began the year with $2 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 Bitcoin Trust Inflows Outpace Mined Bitcoin: The inflows into Grayscale Bitcoin Trust have continued to grow as a percent of mined Bitcoin. This metric is significant because miners are known to be the market’s natural sellers, often using their newly mined Bitcoin to pay for operating expenses. In 4Q20, Bitcoin inflows were approximately 194% of mined Bitcoin.
Institutions are Here: Institutions have historically accounted for a majority of Grayscale inflows. This was especially true in 4Q20 as institutions accounted for 93% of capital inflows, or $3.0 billion. This may not come as a surprise given the recent flurry of news that institutions have warmed up to Bitcoin. Indeed, Grayscale Bitcoin Trust accounted for 87% of all inflows to our product family, the highest proportion since 2Q17, further evidence of institutions looking to Bitcoin as a reserve asset.
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.
Surging Demand from RIAs: In 4Q20, Grayscale received substantial inbound interest from wealth managers interested to learn more about Bitcoin to satisfy the growing number of client requests. This is part of an emerging trend of the last six months that is critical for continued adoption.
