Grayscale Investments, the largest digital currency asset manager with assets under management – as of May 31st 2020 – of over $3.8B, has been purchasing Bitcoin at a far quicker rate than miners are producing them.
According to analysis from crypto investor Kevin Rooke, Grayscale have added 19,879 BTC to their Bitcoin Trust in the last week, in comparison to the total of 7,081 BTC that was mined. That’s a rate of 281%!
Grayscale added 19,879 BTC to their Bitcoin Trust since last week (53,588 BTC since the halving).
Bitcoin miners only produced 7,081 BTC since last week (39,544 BTC since halving).
— Kevin Rooke (@kerooke) June 25, 2020
Although, this is not the first time that the investment firm has invested so heavily in digital assets, it is estimated they purchased one-third of all the newly mined Bitcoin on the market over a 3-month period since the halving.
This was accumulated into their Bitcoin Trust to be purchased by institutional investors and large hedge funds. The same strategy of bulk buying has continued throughout Q2 taking their total assets purchasing since the May block halving to $0.5B.
If they continue purchasing Bitcoin at the rate of 281% as mentioned above, it is estimated that they will own a staggering 3.4% (625,000 BTC) of the total Bitcoin supply by January 2021.
So, you may be asking yourself, what has driven this bullish strategy by Grayscale Investments?
The pandemic is certainly taking its toll on the global economy and digital assets are becoming more appealing to corporations and especially institutional investors. This financial awakening could be the opportunity that Grayscale are capitalising on by increasing their portfolio of the leading cryptocurrency, Bitcoin.
On the same line of thinking, historical movements show that directly following the last two halving events, Bitcoin began a bullish cycle and achieved new all-time highs. If we are to see $20,000 plus for Bitcoin sometime in 2021, then Grayscale’s assets would exponentially grow if they maintain their current position.