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What is Grayscale Investments?


Jan 17, 2023

What is Grayscale Investments?

The American company Grayscale Investments appeared in 2013. She was established by the owner of Digital Currency Group Barry Silbert known in the crypto industry of the venture industry. She owns other assets, in particular, the credit platform Genesis Global Trade and Media Coindesk.

Shortly after the founding Grayscale, the placement of its first and most famous cryptocurrency trust is Bitcoin Investments Trust (GBTC). Trust shares could purchase accredited investors. Later, GBTC received approval from Finra to the right to trade, after which the listing on an adjustable OTC OTCQX adjustable off.

What is a trust?

Trust is a legal structure on the balance of which you can add various assets. You can add any legal product that has value – money, shares in business, securities, property and even crypto assets to trasts.

Trust shares can be traded in stock or over -the -law markets. The peculiarity is that their buyer actually invests in the basic asset, but not directly, but indirectly.

Who and why invest in GrayScale ramers?

Cryptusters are often sold with a “bonus” to a spare price of a basic asset, and Grayscale also takes a commission of 2% for management, invest in these Grayscale products only for a long -term prospect and only large investors. However, this product solves one important problem for them – legal.

For professional participants in the financial sphere, the legality of the investment object is a basic condition. Therefore, Grayscale products became for institutional investors the first way of passive investment in cryptocurrencies amid the lack of a necessary legal basis.

In addition, crypto traffic is possessed by some other advantages. In particular, they https://gagarin.news/news/how-does-staking-differ-from-mining/ allow the investor to avoid the problem of reliable storage of large sums of cryptocurrencies. Also, when starting Grayscale’s highways in the United States, there were no clear rules regarding the taxation of digital assets, and GBTC and similar products are a traditional asset with a clear tax payment scheme.

In 2022, the ability to trade in Grayscale investment products appeared in retail investors using the Robinhood application.

How much are Grayscale Rales?

Each Trust Promotion from GrayScale is provided with a certain number of basic asset – cryptocurrencies, but their prices differ.

In the crypto industry, the phenomenon of “Grayscale Prize” is known when the trust is trading with a margin of the basic asset on crypto -rhizas and has a demand. Such a trend is an indicator of mood among institutional investors.

If the “whales” are ready to overpay for a trust, then bull sentiments in the market of cryptocurrencies.

It happens the other way around: a trust from Grayscale is traded at a discount to the price of a basic asset, which means that a bear trend prevails.

If in April 2019 the AUM indicator was a little more than $ 1 billion, then after only two years, in the spring of 2021, it has already exceeded $ 50 billion. By May 2022, due to correction on the crypto, the AUM value also decreased, to about $ 26 billion. Of these, more than $ 18.7 billion falls on GBTC.

Due to the popularity of the first cryptocurrency among institutional investors, Grayscale Investments has become the world’s largest famous bitcoin holder. According to the Bitcoin Treasuries website, in May 2022 the company owned almost 655,000 BTC.

What other investment products Grayscale have

In addition to trusts, GRYSCALE offers separate digital currencies with a basic asset from a cryptocurrency basket:

  • Grayscale Decentralized Finance Fund-Defi-projects tokens.
  • Grayscale Digital Large Cap Fund – high capitalization crypt.
  • Grayscale Smart Contract Platform Ex-Vetheum Fund-Native Coins of Blockchain Platforms with Smart Contracts.

In February 2022, Grayscale also launched its first exchange fund (ETF) – Grayscale Future of Finance (GFOF). Its basic assets are shares of more than 20 public companies operating in the field of cryptocurrencies. It is traded on the New York Stock Exchange (NYSE).

A few months later, Grayscale posted a new ETF UCITS, which is a “shell” for GFOF.

How Grayscale is developing?

The key element of the strategy in the company is considered to be the launch of a spot-bitcoin-setf in the United States, which they want to open on the basis of GBTC. He must provide access to investments in the first cryptocurrency to millions of individual investors who trade in the stock market. Polls show the presence of significant potential demand for such an exchange fund.

However, when this happens, it is unknown. To launch the tool, it is necessary to resolve the SEC, and since 2018, many financial companies are unsuccessfully trying to get it for their ETFs. Grayscale has already stated that they were ready to sue the regulator in case of refusal.

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