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While it may be too early to project the possible performance of Grayscale in 2021, the spate of patronage the company recorded in the last two quarters of 2020 looks quite inspiring.
In what confirms the continued embrace of Bitcoin (BTC) and altcoins by institutional investors and the big-money clients, Grayscale’s total Assets Under Management (AUM) has been reported to top $19 billion, a significant uplift from the $16.4 billion reported a week ago. According to a report by CoinDesk, Grayscale hit this AUM milestone on December 28, and Grayscale’s Bitcoin Trust holds by far the largest chunk of the total assets at $16.3 billion.
The recent rally of Bitcoin to new highs as recorded in the past days started as a chain reaction that took its precedent months ago when Wall Street firms and institutional investors began betting big on Bitcoin. The investment made by the likes of MicroStrategy Incorporated (NASDAQ: MSTR), Square Inc (NYSE: SQ), and PayPal Holdings Inc (NASDAQ: PYPL) did not just help put Bitcoin in the limelight through mainstream media, it also prompted the embrace of the digital assets by other firms.
With this chain reaction, the price of Bitcoin continued to soar in response to boosted demand for the coin, and institutions like Grayscale that serves institutional investors benefited from this new demand, and hence, the continued increase in the firm’s AUM. Besides BTC, Grayscale’s Ethereum (ETH) AUM is now worth $2.1 billion, while the bulk of smaller holdings in Litecoin (LTC), XRP, and ZCash amongst others helped Grayscale’s total AUM to reach the new milestone.
Grayscale’s AUM May See More Boost in 2021
While it may be too early to project the possible performance of Grayscale in the coming year 2021, the spate of patronage the company recorded in the last two quarters of 2020 makes the case for improved performance provided the tempo is sustained.
Just as has been noted earlier, the continued embrace of cryptocurrency assets by highly liquid companies will continue to have a positive reaction on the price of Bitcoin, and by extension, this will even make more people pick interest in BTC. As a relatively young asset class, Bitcoin and altcoins have tremendous room to grow as the adoption rate is still not optimized owing to certain regulatory provisions in most countries, Grayscale and other hedge funds have enough room to compete for new clients entering the space.
With Grayscale been among the institutions at the forefront of helping to drive the acceptance of BTC, ETH, and other digital currencies, enjoying the dividends of its works through impressed AUM figures does not come as much of a surprise.