Digital Asset Investment Report: Q4 2020

Share:

Share on twitter
Share on linkedin
Share on facebook
Share on email

Url copied!

Q4 2020 Investment Highlights1

  • Total Investment into Grayscale Products: $3.3 billion
  • 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 ex Bitcoin Trust2$33.6 million
  • Majority of investment (93%) came from institutional investors, dominated by asset managers.

Year Ended 2020 (“YE20”) Highlights3

  • Total Investment into Grayscale Products: $5.7 billion 
  • 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 Trust4$19.8 million
  • Majority of investment (86%) came from institutional investors, dominated by asset managers.

The Takeaway

2020 was a hallmark year for Grayscale and digital assets more broadly. Thank you to the community and our investors for making it possible. We are proud to share data that reflects the massive adoption throughout 2020, and specifically, 4Q20.

 

$3 Billion Dollar Quarter: Grayscale experienced unprecedented investor demand, with approximately $3.3 billion of inflows. Investment into the Grayscale family of products surpassed $5.7 billion during 2020, more than four times the $1.2 billion cumulative inflow into the products from 2013-2019.

 

Since inception, the Grayscale family of products has seen nearly $6.9 billion of inflows.  

 

$20 Billion Dollar AUM: Grayscale began the year with $2.0 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.11 This is an incredible testament to the maturation of the digital currency ecosystem.

 

Grayscale Bitcoin Trust Inflows Outpace Mined Bitcoin: As we have noted in prior reports, 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.

 

However, these comparisons are simply to illustrate supply and demand in the market. They do not provide insight into the destination of any newly mined Bitcoin during the measured periods.

 

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.

 

Download the full Grayscale Digital Asset Investment Report (Q4 2020) below.

1 For the period from October 1, 2020 through December 31, 2020.
2 “Grayscale Products ex Bitcoin Trust” include Grayscale Bitcoin Cash Trust, Grayscale Ethereum Trust, Grayscale Ethereum Classic Trust, Grayscale Horizen Trust, Grayscale Litecoin Trust, Grayscale Stellar Lumens Trust, Grayscale XRP Trust, Grayscale Zcash Trust, and Grayscale Digital Large Cap Fund. As of December 23, 2020, Grayscale XRP Trust was closed to new investment.
3 For the period from January 1, 2020 through December 31, 2020.
4 See footnote 2.

Access the Report

Related articles
An Introduction to Brave
Chainlink
An Introduction to Chainlink
Decentraland
An Introduction to Decentraland

Sign up and join the Grayscale community

* Required fields
Geometric shape

All set! Thank you.