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Grayscale Announces the Launch of its Diversified Crypto Investment System for Trading

Grayscale Investments, the American-based crypto management fund, announced a plan to launch its diversified crypto investment system for trading. This investment product is known as Grayscale Digital Large Cap Fund (GDLCF), and trading will begin in no distant time with access to US securities.

Being Grayscale’s fourth investment product made open to the public, the following shares will be available to investors: Grayscale Bitcoin Trust (OTCQX: GBTC), Grayscale Ethereum Classic Trust (OTCQX: ETCG), and Grayscale Ethereum Trust (OTCQX: ETHE).

Matthew Beck, Grayscale’s Director, Investments, and Research, commented that cryptocurrencies are a new and significant source of profits to investors and which also allows for diversification. He then noted that this new initiative would help investors who wished to have new ways of gaining profits.

“Digital assets represent a new and important alternative source of return for investors. Their unique market opportunities, use cases, and risk exposures can also enhance diversification. A well-constructed, diversified investment product like Grayscale Digital Large Cap Fund is an important tool for investors seeking to build more balanced portfolios with higher risk-adjusted returns,” Beck said.

Through their registered investment accounts, investors have the opportunity to buy and sell without restrictions tradable Grayscale Digital Large Cap Fund shares. This opportunity parallels their beforehand ability to buy and sell unregistered securities; the only difference is that they have to look for the symbol: GDLCF.

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Wilshire Phoenix Files for Publicly Traded Bitcoin-Backed Fund Approval Seeking to Challenge Grayscale’s Dominance

Wilshire Phoenix investment firm has filed to launch a publicly-traded trust identified as Bitcoin Commodity Trust (BCT).

The New York-based investment company has filed the s-1 registration statement with the US Securities and Exchange Commission (SEC) for a publicly-traded Bitcoin fund in accordance with regulatory requirements.

The investment company said, “The shares will provide investors with exposure to Bitcoin in a manner that is accessible and cost-efficient without the uncertain and often complex requirements relating to acquiring or holding Bitcoin.”

Wilshire in a new hunting ground

The aim of Wilshire’s new BCT is to have its shares available for public investing and trading on OTC Markets. The filing said that once the shares of trust are issued, they can be bought and sold throughout the trading day just like any other publicly traded security.

The investment firm aims to raise $2 million from the sale that will be used to buy Bitcoin. The filing states that Wilshire Phoenix’s Bitcoin Commodity Trust would have no assets other than Bitcoin. Though it may hold US dollars for short periods of time for selling and buying Bitcoins, fees, and payment of redemptions.

Wilshire Phoenix has had a good relationship with Coinbase for several years. However, the new filing has given Fidelity Digital Assets the task of holding Wilshire Phoenix’s Bitcoin custody. The filing also says that while Bitcoin held would only be insured against theft above $100 million, cash would be covered under the Federal Deposit Insurance Corporation.

If Wilshire’s BTC approved, then it could place a direct competition with Grayscale’s Bitcoin Trust (GBTC), which at current market prices has 365,000 Bitcoin worth $3.35 billion under management.

Similar to Grayscale’s Bitcoin Trust (GBTC), Wilshire’s BTC seeks to enable the retail investors to purchase Bitcoin through shares of stock on the mainstream market, with every share backed by Bitcoin and priced according to the going market rate of Bitcoin.

However, GBTC frequently bears a high premium, implying that customers pay mostly higher prices compared to purchasing actual Bitcoin on the crypto market. This basically includes a 2% annual fee for custody. Wilshire Phoenix’s new filing proposes a lower fee of 0.9%. Furthermore, while Wilshire Phoenix’s shares are redeemable, this option is unavailable for investors of Grayscale.

US SEC shoots down latest Bitcoin ETF

Wilshire Phoenix sought approval for a Bitcoin Exchange-Trade Fund (ETF), an application that was rejected by SEC in February 2020. The Exchange-Traded Fund proposed to hedge Bitcoin against US Treasury bills.

Wilshire Phoenix’s idea was that an ETF would assist retail investors in gaining Bitcoin exposure at a low cost. However, the SEC rejected Wilshire Phoenix’s proposal to develop the Bitcoin-backed ETF. The US regulator said that market manipulation and fraud were main concerns for the rejection.

The agency concluded that Wilshire had not presented adequate evidence that the Bitcoin market was resistant to illicit activities and market manipulation. The regulator has also rejected many applications for a Bitcoin ETF, including Gemini and Bitwise proposals, thus leaving no local options for US-based investors.

Grayscale CEO Optimistic that US Regulators Can't Stop Bitcoin

Barry Silbert, CEO of Grayscale Investments thinks that Bitcoin has too much support from policymakers in the United States to ever be shut down.

Silbert, CEO of the cryptocurrency investment firm Grayscale Investments told investors that he was “cautiously” optimistic that the regulations for cryptocurrency in the US are improving.

On July 16, during a Grayscale investor call, Silbert asserted that he believes the US is past the point of banning bitcoin due to the perceived risk by regulators. He said:

“There’s enough support in DC from policymakers and regulators that Bitcoin has a right to exist and ultimately you can’t shut it down.”

The Grayscale CEO claims that relationships between blockchain firms and regulators are improving thanks to the influence and effort of groups like that Blockchain Association—a group that has been appealing to the Securities and Exchange Commission on behalf of digital firms, and Coin Center a non-profit advocacy group for cryptocurrency. Silbert said on the call, that the Blockchain Association and Coin Center are “educating policymakers around the benefits of this technology in this asset class.”

Silbert added:

“The catastrophic regulatory policy risk that maybe would have existed previously in DC is behind us.”

Grayscale Leading Institutional Investment

Since the Bitcoin halving event on May 12, Grayscale Investment, the world’s largest digital asset management company, has bought more Bitcoins on behalf of its institutional clients than the number of Bitcoins mined in the same period. The American-based digital asset manager continues accelerating its rate of Bitcoin acquisition, despite Goldman Sachs recently determining the cryptocurrency an asset unworthy of investment.

In Q2 2020, Grayscale reported a substantial increase in the inflow of cryptocurrencies which totaled $905.8 million—an increase of $400 million from Q1.

Grayscale Investments Opens Trading for Grayscale Bitcoin Cash and Litecoin Trusts

Grayscale Investments, the world’s largest digital currency asset manager has opened public trading for two prominent altcoins, the Grayscale Trust for Bitcoin Cash and Litecoin.

Grayscale Investments has announced eligible Shares of Grayscale Bitcoin Cash Trust will be available to trade on OTC Markets under the symbol: BCHG and eligible Shares of Grayscale Litecoin Trust will be available to trade on OTC Markets under the symbol: LTCN.

The institutional-grade digital asset investment firm Grayscale, has launched these public altcoin offering after receiving the approval of the Financial Industry Regulatory Authority (FINRA) back in July.

The BCHG and LTCN trusts are not registered with the United States Securities and Exchange Commission (SEC) but allow mainstream investors exposure to cryptocurrency assets without having to buy and store the tokens themselves.

Institutional Interest in Crypto Investments Skyrockets

Grayscale investments company has been at the forefront of providing a means of investing in cryptocurrency without having to actually hold the digital assets. This service has gained lots of popularity among traditional investors who want to bypass volatility in the crypto space.

The Trusts have offered private placements to accredited investors since March 2018. As of July 31, 2020, there were 2,500,800 Shares outstanding of LTCN and each Share represented ownership of 0.09413112 Litecoin. Shares created through each Trust’s respective private placement become eligible to sell into the public market after a statutory one-year holding period under Rule 144 of the Securities Act.

All investors with access to US securities will be able to buy and sell freely-tradable shares of BCHG and LTCN through their investment accounts in the same manner as they would other unregistered securities.

There is currently $16.8 million worth of BCH under management in the Bitcoin Cash Trust and $13.5 million in Grayscale’s Litecoin Trust. The New York-based Grayscale will take a 2.5% cut of the trust each year—this means that the amount of Bitcoin Cash and Litecoin held in its trust will decrease over time.

Grayscale has been providing several cryptocurrency products for OTC trading, and the latest being shares of the company’s Litecoin and Bitcoin Cash Trusts for trading on OTC markets. Litecoin and Bitcoin Cash are now the company’s sixth and fifth publicly-traded cryptocurrency products.

In the recent past, the company obtained approval to offer shares for Bitcoin (BTC), Ethereum Classic (ETC), and Ethereum (ETH). Zcash (ZEC), Stellar Lumens (XLM), Horizen (ZEN), and XLM are also offered for trading via a trust at the company. These are the largest coins by marketcap on the market, except for Chainlink which recently surged into fifth position.

Public Companies Now Hold Almost $7 Billion Worth Of Bitcoin

At the time of writing, there is almost $7 billion of Bitcoin currently held by 13 publicly listed companies. Companies including Grayscale, Galaxy Digital, Microstrategy, and Square, are among the largest holders of cryptocurrency, as businesses react to a change in sentiment towards Bitcoin and other cryptocurrencies.

Several high profile influential figures that have previously cast doubt upon cryptocurrency are now also changing their tune, as blockchain technology becomes an undeniable force for innovation.

Gold has historically been the go-to as a hedge against economic uncertainty, but the rise in adoption of Bitcoin has grown exponentially throughout the last decade, drawing the attention of some of the biggest names in tech.

Jack Dorsey, CEO of Twitter and payments processing service Square, publicly tweeted that Square had invested $50 million of the company’s holdings into Bitcoin, along with details of how other publicly traded companies could do it too.

Grayscale has been stacking huge amounts of Bitcoin on behalf of clients over the past year, with a total of 449,596 BTC under management in its BTC trust.

Software giant Microstrategy currently holds 38,250 BTC, the second-largest holding of cryptocurrency than any publicly traded investor, other than Grayscale. The holdings also mean that an array of shareholders are also indirectly exposed to cryptocurrency as Bitcoin makes the company’s balance sheet.

Interestingly, the government of Norway holds a 2% stake in Microstrategy, meaning that all Norwegians are now also exposed to Bitcoin indirectly.

Investments by the publicly traded companies on this list are proving to be a catalyst for the demand of Bitcoin on an enterprise level, and we can expect to see this list keep growing.

Bitcoin is Making its Way to $12K and Beyond as BTC Supply Expects Massive Shortage

2020 has witnessed a rapid growth of institutional investments in Bitcoin. In recent months, MicroStrategy, Square, Stone Ridge Asset Management have all invested in Bitcoin. Grayscale Bitcoin Trust has also recently recorded its largest-ever quarterly inflows. Bitcoin is currently trading at $11,433.

MicroStrategy, the billion-dollar Nasdaq listed firm purchased a total of 38,250 Bitcoin (BTC) at an aggregate purchase price of $425 million. The leading intelligence firm believes that Bitcoin is a dependable store of value and an attractive investment asset. This purchase of Bitcoin also enabled the Norwegian Government Pension Fund, the Vanguard Group, and BlackRock to indirectly own more than 10,000 Bitcoin altogether.

Less than a month later, Square also purchased $50 million in Bitcoin, which is roughly 1 percent of the firm’s total reserve assets. This also led to the speculation of its industry rival, PayPal, could eventually follow suit.

Stone Ridge Asset Management recently purchased 10,000 Bitcoin as part of its treasury reserve strategy, similar to MicroStrategy. NYDIG, its subsidiary will be responsible for the custody of these Bitcoins.

As institutions are slowly picking up the trend of investing in Bitcoin as a hedge against the current market turbulence, Bitcoin recently hit a high of trading volume on Oct. 4, reaching $71.2 billion. During the period of Sept. 24 to Oct. 8, Bitcoin’s trading volume hit a high stretch since May 2020.

However, Bitcoin’s trading volume suddenly dropped on Oct. 9, and has not been able to surpass $26.2 billion in the past week. According to crypto analytics firm Santiment, a rise in BTC trading volume could be an early sign that BItcoin is making a move towards $12,000 and beyond.

A crypto technical analyst, Josh Olszewicz, recently tweeted that Bitcoin has formed a bullish TK Cross, according to the Ichimoku Cloud indicator. Olszewicz explained:

“Bullish TK recrosses have only ever went on to break down below the 20-week EMA (140-dialy EMA) once, in 2014.”

The trader noted that this trend historically leads to a sharp upwards movement, with a 80 percent strike rate, since 2013.

Dan Tapiero, founder of DTAP Capital recently also commented that as Grayscale Investments currently controls 2.4 percent of the Bitcoin supply, there could be a shortage of Bitcoin. He added:

“Shortages of Bitcoin possible. Barry’s Grayscale trust is eating up btc like there is no tomorrow. If 77% of all newly mined turns into 110%, it’s lights out. Non-miner supply will get held off mkt in squeeze. Shorts will be dead. Price can go to any number.”

Image source: Bermix Studio via Unsplash

MicroStrategy's Bitcoin Investment Earns $103 Million with ROI of 24.3% in the Last 79 Days

At the time of writing, Bitcoin’s price is around $13.8K. Since August 11, with its Bitcoin purchase, MicroStrategy has earned $2.7k per Bitcoin (BTC) for a total of $103 million. The return on investment is 24.3% over the last 79 days.

MicroStrategy, the Nasdaq-listed company (Nasdaq: MSTR) and the largest independent publicly-traded business intelligence company, has purchased large amounts of Bitcoin twice, once in August and the second time in September.

On Aug. 11, MicroStrategy purchased 21,454 BTC for $250 Million. On Sep 14, it bought 16,796 additional Bitcoins for $175 million. MicroStrategy currently holds a total of 38,250 Bitcoins with an aggregate purchase price of $425 million, averaging $11.11k per Bitcoin ncluding fees and expense.

Bitcoin outperforms the US stock market

In the meantime, Bitcoin seems to be outperforming three major US stock indexes. While Nasdaq and S&P 500 gains 8% and 1.7% respectively the Dow drops a bit.

The Nasdaq index closed at 10,782.82 on August 11 and at 11,431.35 on October 27, with the return rate being 6%.

As for the Dow Jones, the stock index closed at 27,686.91 on August 11 and closed at 27,463.19 on October 27, with the return rate translating to -0.8%.

The S&P 500 closed at $3,333.69 on August 11 and at 3,390.68 on October 27 and the return rate is 1.71%.

Bitcoin-related companies like Grayscale are expected to see significant gains these days as well. According to the Grayscale report in Q3 of 2020, $1.05 billion was invested in their product family – a group of goods produced by the same company and released under the same brand. This makes it the largest inflow in a single quarter in their history. 84% of investments are from institutional investors, dominated by hedge funds.

What is Grayscale Bitcoin Trust (GBTC)?

The Grayscale Bitcoin Trust is an investment vehicle that is designed to enable investors to trade Bitcoin shares without actually owning the underlying cryptocurrency.

Grayscale Bitcoin Trust (GBTC) background

The Grayscale Bitcoin Trust was first established in 2013 by Barry Silbert, who also is the founder and CEO of Digital Currency Group (DCG), a bitcoin and blockchain investment company that has invested in lots of popular companies such as Ripple, Coinbase, Coindesk, Circle, Kraken, and Chainalysis. Grayscale Bitcoin Trust is sponsored by Grayscale Investments, LLC (Grayscale), which is one of the world’s largest digital currency asset manager. GBTC is a Bitcoin investment trust exclusively invested in the mainstream cryptocurrency. Through GBTC, you can buy, hold, and sell Bitcoin shares in a similar way as stocks without worrying about the complex operations that may come with holding the actual cryptocurrency.

Why GBTC

There are a few advantages to owning GBTC.

GBTC enables one to buy and hold Bitcoin in a simplified way, with guaranteed safety. To actually own Bitcoin, you need to know where to buy and sell the digital asset. To store Bitcoin safely, you need to manage crypto wallets, a crypto account, and a private key. You will lose the Bitcoin if you forget the private key credentials or if the key is disclosed to others or is hacked. With GBTC, you don’t need to worry about the problems in buying, storing, and safekeeping BTC on your own. You can gain exposure to BTC in the form of security, similar to buying a stock.

Regulation around GBTC may be more comprehensive than regarding Bitcoin as well, as GBTC is the first publicly-quoted Bitcoin investment tool on OTCQX (OTCQX: GBTC). GBTC and GETH became SEC reporting companies on January 21, 2020, and on October 5, 2020, respectively.

GTBC shares, which operate like stocks and bonds, provide tax-paying conveniences for investors. So you don’t need to worry about how to fill the tax return, in comparison to when you hold Bitcoin directly.

With GBTC, investors gain tax advantages, as shares can be held in certain IRA, 401ks, Roth IRA, brokerage, and investor accounts.

GBTC stock, fee, and returns

As of October 30, 2020, GBTC has assets under management (AUM) of $$6.4 billion and has 502,488,200 shares with one GBTC representing 0.00095336 bitcoin. The price per share is roughly approximate to the value of Bitcoin represented in the share, but those two can be substantially different. As of October 30, 2020, GBTC has around 479,052 bitcoins.

GBTC’s annual management fee is 2%. At close as of 10/30/2020, the GBTC share has a return of 9,021.43% since its inception on Sept 25, 2013.

There are two ways to buy GBTC shares. You can purchase GBTC shares directly if you are an accredited investor and the minimum investment requirement is $50,000. But this way of buying is restricted and subject to significant limitations on resale and transferability. For general investors, you can buy GBTC stock through OTC Markets like the OTCQX. The GBTC stock price fluctuates like a traditional stock. Price indexes you can visit are Yahoo, OTCMarkets, and TradeBlock.

Grayscale crypto trust diversity

To take advantage of crypto trusts, Grayscale has extended its investment services to other major cryptos besides Bitcoin. It now provides crypto trusts including Grayscale Bitcoin Cash Trust (BCH), Grayscale Ethereum Trust (ETH), Grayscale Ethereum Classic Trust (ETC), Grayscale Litecoin Trust (LTC), Zcash Trust (ZEC), and more.

More bitcoin derivatives and more institutional investors

We have been seeing more investment derivatives and more direct institutional investors, which could make bitcoin and crypto a more mature market.

3iQ, founded in 2013, was the first Canadian regulated investment fund manager to manage a public Bitcoin investment fund (TSX:QBTC.U) and multi-crypto asset fund. Arrano Capital, the blockchain arm of Venture Smart Asia, was the first crypto fund approved by Hong Kong’s Securities and Futures Commission (SFC).

Bakkt, owned by Intercontinental Exchange, the parent organization of the New York Stock Exchange, is the most famous in providing Bitcoin Futures.

As for Bitcoin ETFs, there are no regulated ETF products yet in any major countries.

Institutional Bitcoin investors include MicroStrategy, which currently holds a total of 38,250 Bitcoins with an aggregate purchase price of $425 million and an average price of $11.11k. Square now holds 4,709 bitcoins with a purchase price of $50 million.

Bitcoin Price Surges to 2020 High of $15,960, MicroStrategy Sees $182 Million Increase

The Bitcoin price reached a new high for 2020 gaining over 12% in the last 24 hrs to reach $15,960 with many analysts predicting that the surge is set to continue to $17,000.

Over the last 24 hours, the price of Bitcoin (BTC) has surged by 12% and smashed through the $15,000 resistance for the first time since January 2018. The price of $15,960 is a new high for the year.

Source: Trading View BTC/USDT

According to data from Trading View, the BTC/USD pair has gained over $1800 dollars and 12.86% in the last 24 hours. According to crypto data analytics platform Messari, Bitcoin has now managed to stay above the $15,000 support for 20 days of its life-cycle, roughly 0.4% of its life.

Grayscale CEO Barry Silbert, whose firm’s AUM is rising rapidly triumphantly reported on Twitter:

“People will never again say Bitcoin is dead.”

MicroStrategy is now looking like geniuses to the rest of the world after choosing Bitcoin as its reserve asset. As reported by MicroStrategy Bitcoin tracker on Twitter, the intelligence firm is up by $182 million dollar in the last 24 Hours—their original investment of $425 million in BTC is now valued at $607,639,500.

Bitcoin’s bullish behavior has been rampant in the lead up to the US elections and the prevailing uncertainty. While US presidential candidate Joe Biden is just six electoral votes away from victory, with officials continuing to count ballots in Georgia, Pennsylvania, North Carolina, Arizona, and Nevada. Head of Research at Blockchain.com and top UK economist Dr. Garrick Hileman told Blockchain.News that the prevailing uncertainty is one of the forces behind BTC’s continued bull run. He said:

“Anything that negatively impacts the perception of a safe and stable dollar will likely boost interest in bitcoin and other cryptocurrencies.”

BTC is also surging amid the news the US Department of Justice has seized more than $1 billion dollars from an anonymous hack who managed to crack a wallet connected with the infamous silk road.

For now, the BTC price surge appears set to continue with may analyst predicting we should reach $17,000 in the next few days, but get ready for some extreme volatility as the markets continue to watch the election results.

BTC Institutional Investor Base Now Targeting Ethereum (ETH), says Grayscale Managing Director

Michael Sonnenshein, Managing Director of Grayscale Investment LLC has noted that Ethereum is becoming the preferred investment choice of a large number of the institutional Bitcoin firm’s client-base.

While many people have difficulties finding the best cryptocurrencies to invest in, Michael Sonnenshein, the managing director at Grayscale Investment LLC, has a new revelation that could help investors and traders who are looking for new cryptocurrency investments. Sonnenshein admitted that although Bitcoin has been the key target for many investors, a rising number of people are showing interest in Ethereum during this year.

Grayscale Investment LLC is a crypto investment firm and is owned by Digital Currency Group, which is also the parent company of CoinDesk media outlets.

In a recent interview with Bloomberg, Sonnenshein said that the year 2020 has seen a new group of investors who focus on Ethereum only. He said:

“There’s a growing conviction around Ethereum as an asset class. The development of the asset class has continued to solidify itself. Ethereum has along the same lines of the staying power Bitcoin has.”

If many investors give more attention to Ethereum, then the interest would be for completely different reasons. Since June this year, Ethereum has become more popular among investors partly due to DeFi ecosystem and the launch of Eth 2.0’s Beacon Chain.

While Bitcoin has been considered an emerging asset class, blockchain technology strives to function as the “world computer”, which offers an inclusive ecosystem for decentralized applications.

There have been various opinions on whether Ether could become a major competitor to Bitcoin as an asset class.

Vishal Shah, founder of Alpha5 crypto derivatives exchange, said:

“Ether benefits from spillover and likely has more conversation around it from crypto-natives. For the uninitiated, [it is] hard to see how bitcoin is not the sole on-ramp.”

Raoul Pal, co-founder and CEO of financial media group Real Vision said:

“I’ve always thought this digital asset space is huge – and it’s not just Bitcoin – because there are going to be different applications for different things […] I think of the two [Bitcoin and Ether] as having a very nice combined asset allocation.”

Why Ethereum Has Made Huge Gains

As Ethereum google searches rival that of Bitcoin, this does not imply that Ether transactions are surpassing Bitcoin. Search volume is a major indicator of what has momentum and is indicating signs of growth. It may correspond to people showing a lot more interest and buying Ethereum because the cryptocurrency is the hegemonic leader in the field of decentralized applications (dApps). The dApps market has immensely attracted many people and is expected to grow in the future. This could be another reason why people seriously consider Ethereum for the future.