Crypto Investment Firm Grayscale Brings In $330 Million Even as Market Sags
*by Tanaya Macheel*
Next year may signal a more widespread adoption of crypto among institutional investors ー if the current momentum continues, that is.
Grayscale, a veteran digital currency investment firm, saw record inflows, $330 million in the first three quarters of 2018 ー most of which came from institutional investors including hedge funds, endowments and pensions, according to the managing director.
“That’s against nothing but price decline,” which investors are using as “a time to create \[an\] initial position or start scaling into a position” in Bitcoin or other crypto assets, Michael Sonnenshein told Cheddar on Friday.
In the third quarter, 73 percent of inflows were into the Bitcoin Investment Trust, while 27 percent were into Grayscale products tied to other digital assets, according to Grayscale’s third-quarter Digital Asset Investment Report, published Thursday.
For the year to date, Bitcoin accounted for 66 percent of total assets raised and 34 percent went into other digital assets.
Most of Grayscale’s capital inflows are going to its Bitcoin product because investors are most familiar and comfortable with it. Eight of Grayscale’s nine different products are for single currencies ーlike Bitcoin or XRP. The ninth is a bundle that offers exposure to the largest digital currencies by market cap.
“We’re starting to see a lot more interest in those types of structures, especially in the wake of seeing other firms shut down their index products,” Sonnenshein said of the large cap fund.
“A lot of folks want to generally allocate to the space and not have to choose winners or avoid losers and like the idea of the large cap fund for that very reason.”
Since late last year’s run-up, when the price of Bitcoin reached nearly $20,000, Fidelity, the third-largest asset manager in the world, announced plans to launch a crypto custody and institutional brokerage business. Goldman Sachs announced plans to open a crypto trading operation. Intercontinental Exchange, the parent company of the New York Stock Exchange, has entered the crypto industry through a new company called Bakkt. Earlier this week, Morgan Stanley released a bullish report on cryptocurrencies, hailing Bitcoin and other digital assets as a "new institutional investment class.”
“The once taboo nature of investing in digital currencies has been shrugged off by most investors. When we go sit down with our hedge fund clients, endowments, whatever they may be, there is so much knowledge on the other side of the table that, to us, is really validating," Sonnenshein said.
For full interview [click here](https://cheddar.com/videos/morgan-stanley-says-cryptocurrencies-are-a-new-asset-class).
Rishi Bharwani, the director of partnerships and policy for nonprofit Accountable Tech, joined Cheddar to discuss the hot button topic of regulatory oversight of social media giant Facebook. Bharwani discussed the bipartisan pieces of legislation already making their way through Congress and said the body should pass stronger data privacy laws, ban surveillance advertising, and require meaningful accountability and transparency from the company. "Now I think we've reached a boiling point where congressional action is needed and inaction is no longer acceptable," he said. Bharwani also called for a concurrent investigation into Mark Zuckerberg's company.
The United Nations COP26 climate talks are scheduled for October 31 to November 12 in Glasgow, Scotland. Heads of state will be joined by private sector leaders to once again discuss the shrinking window of time left to take action against global temperature rise. Barbara Humpton, CEO of focused technology company Siemens U.S., is also attending and spoke to Cheddar about what she hopes to see during the conference for both the public and private spheres. "What we are really urging is that there are large commitments made in Glasgow and that we really commit to this next decade of action," she said.
Hertz, the car rental giant, has placed an order for 100,000 Tesla Model 3s and sent Tesla's value soaring, pushing it into the $1 trillion club during the trading day Monday. Dan Ives, managing director of equity research for Wedbush, told Cheddar's 'Closing Bell', "It shows [electric vehicles] going to the mainstream." The move gives Hertz a leg up by differentiating itself from competitors and shows Tesla's dominance in the marketplace, He noted. And as for that trillion-dollar valuation? Ives said he could see it rising even higher down the road.
Zaire Wade and Jalen Newsome, Co-founders and Co-CEOs of 'YNG DNA' join us to talk about their new NFT collection available Oct. 25 on WAX NFT blockchain.
According to new research by Twitter, the social media platform algorithm amplifies content from the "political right" rather than those on the left. The company says this data comes as the platform has been taking the time to research the implications of its algorithm and whether or not it has caused any "unknown harm". President and CEO of Media Matters for America Angelo Carusone, joined Cheddar to discuss more.
The gaming industry is about to take center stage as the next dominant technology platform, according to a new report from the consulting firm Activate. The pandemic has accelerated gaming's popularity, with overall time spent gaming increasing by 29 percent. Michael J. Wolf, co-founder and CEO of Activate, joined Cheddar to discuss some of the key findings of the report and why he thinks video game platforms are the only ones that stand a chance of building the so-called metaverse.
Voyager, Nanoracks, and Lockheed Martin are all teaming up to develop the first-ever free-flying commercial space station with room for a crew of four astronauts. The private companies are joining forces as part of NASA’s greater mission to retire the International Space Station by the year 2030. The low-earth orbit space station will be called "Starlab," and is planned to achieve operational capability by 2027. Lisa Callahan, Vice President and General Manager of Commercial Civil Space at Lockheed Martin, and Matthew J. Kuta, President and Chief Operating Officer of Voyager Space, joined Cheddar’s Opening Bell.
Jill and Carlo cover the latest developments in the Alec Baldwin prop gun shooting, when vaccines for kids as young as 5 should be approved, new reporting on Facebook and more.
