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'Difficult to Ignore' Shift As Grayscale Buys More Bitcoin Than Miners Generate

By Linas Kmieliauskas
'Difficult to Ignore' Shift As Grayscale Buys More Bitcoin Than Miners Generate 101
Source: Adobe/butenkow

US-based major digital asset manager Grayscale said it recorded its largest quarterly inflows in the second quarter, when it also started buying more bitcoin (BTC) than it has been generated after the halving in May.

In its latest report, the company revealed:

  • In the second quarter, quarterly inflows reached USD 905.8m, or 80% more than in the first quarter.
  • For the first time, inflows into Grayscale products over a 6-month period crossed the USD 1 billion threshold.
  • Grayscale Bitcoin Trust and Grayscale Ethereum Trust both experienced record quarterly inflows of USD 751.1m and USD 135.2m, respectively.
  • In 2Q20, new investors accounted for USD 124.1m of inflows and 57% of the investor base, up from 49% during the T12M (trailing twelve-month).
  • 81% of returning institutional investors in 2Q20 have now allocated to multiple products, an increase from T12M of 71%.
  • In 2Q20, Grayscale Ethereum Trust saw over USD 135 million of inflows, almost 15% of total inflows into Grayscale products.
  • Grayscale Litecoin Trust and Grayscale Bitcoin Cash Trust have surpassed USD 20 million in combined inflows since inception.

Also, the asset manager said that after Bitcoin’s halving in May, 2Q20 inflows into Grayscale Bitcoin Trust surpassed the number of newly-mined Bitcoin over the same period. Now, around BTC 900 (USD 8.3m) are generated per day on average.

"With so much inflow to Grayscale Bitcoin Trust relative to newly-mined Bitcoin, there is a significant reduction in supply-side pressure, which may be a positive sign for Bitcoin price appreciation," they said.

'Difficult to Ignore' Shift As Grayscale Buys More Bitcoin Than Miners Generate 102
Source: Grayscale

According to the company, the record inflows reflect rapidly growing demand for digital assets, as investors increasingly look to diversify their portfolios amid aggressive monetary and fiscal intervention resulting from the COVID-19 crisis.

"With inflows over the last six months alone that eclipse cumulative assets raised over the prior six years, it’s difficult to ignore the empirical data signaling a shift in sentiment towards digital assets from individual and institutional investors alike," Grayscale said.
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Learn more:
Retail May Consume 50% of Bitcoin Supply After Next Halving – Report
Inside the World's Largest Bitcoin Fund

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