Grayscale Investments already made its mark on the crypto market, becoming its largest asset management firm. While the company has focused primarily on large-cap cryptos, it is looking to expand its influence and branch out to other assets too.
Versatility is Grayscale’s Game
Grayscale Investments made a bold step towards expansion as it filed proposals for 12 new cryptocurrency trusts with a corporate registry in the state of Delaware. The filings indicate that the New York-based firm is looking to move into altcoins, with trusts for assets like EOS, Uniswap, Cardano, and Aave present.
Grayscale has made significant progress with its primary trusts, which accommodated assets like Bitcoin, Ether, Litecoin, and – until recently – XRP. The investment products allow investors to take “auditable ownership of their cryptocurrencies through a traditional investment vehicle.” At the same time, their assets are kept offline for protection.
The company had frozen most of its large-cap trusts last month, following a mandatory lockup period. It completed the reopening process yesterday, announcing on Twitter that investors are once again free to purchase units of its Ether Trust.
As of 4 pm EST today, Grayscale Ethereum Trust resumed the private placement of its shares. The Trust’s private placement is offered on a periodic basis throughout the year and is now available to accredited investors for daily subscription. $ETH https://t.co/wcwbhDmtYj pic.twitter.com/4RZWiQWpJn
— Grayscale (@Grayscale) January 29, 2021
So far, Grayscale has built a sphere of influence in the crypto space like no other company. The company is by far the industry’s largest institutional investor and asset management firm, with close to $25 billion in assets under management as of this month.
Harnessing the Hype Surrounding the Altcoins
The company’s Bitcoin purchasing spree this year has gotten off to a rather roaring start as well. On Thursday, Rafael Schultze-Kraft, the CTO at crypto analytics firm Glassnode, explained that miners had produced only 26,000 BTC this year. On the flip side, Bitcoin had bought 40,000 BTC since January 13.
Bitcoins mined in 2021: ~26,000 BTC
Grayscale holdings in 2021: +40,000 BTC
— Rafael Schultze-Kraft (@n3ocortex) January 28, 2021
Grayscale purchased most of its BTC in the past 18 days. This means the firm had bought about 170 percent more Bitcoin than was even created over the past fortnight.
With talk of a possible liquidity crisis looming, the firm might be looking to pump the brakes on its Bitcoin purchases. If it does, it could merely ride on other assets and the enthusiasm surrounding them. Names like Polkadot, Uniswap, and Aave have all been on the rise in the past few weeks, enjoying the hype surrounding decentralized finance (DeFi).
With investors continually flocking into the DeFi space, there is every indication that these assets will continue to surge. If Grayscale can harness their hype well, it can continue to grow its business – while cooling off with the Bitcoin purchases and letting traders have enough assets to make plays with.