An average of $250.7 million per week flowed into Grayscale’s crypto investment products in the fourth quarter.
Institutional investors invested massively in the crypto market in the fourth quarter of 2020, as evidenced by the fact that crypto investment products from wealth management firm Grayscale enjoyed the greatest popularity during the period.
Led by Bitcoin (BTC) and Ethereum (ETH) investment products, Grayscale’s total crypto financial products reached $3.3 billion in the fourth quarter. This equates to an inflow of US$250.7 million per week. Compared to the third quarter of 2020, the total value has more than tripled, as previously there was only US$1.05 billion.
While the Grayscale Bitcoin Trust raised US$217.1 million per week in Q4, the Ethereum investment fund generated US$26.3 million per week.
In the process, 93% of all new investments came from institutional investors, of which Crypto Trader other asset management firms make up the majority. An increase of 9% compared to the third quarter, when institutions had already accounted for 84% of new capital inflows.
In the full year 2020, a total of $5.7 billion was invested in Grayscale’s crypto investment products. A massive increase on previous years, this figure is more than four times the cumulative investment from 2013 to 2019.
„2020 saw some of the world’s most influential investors publicly support digital currencies as an asset class and some of the largest institutional investors and corporations allocating to Bitcoin,“ Grayscale told Cointelegraph, adding:
„Macroeconomic conditions and current monetary policy are increasingly legitimising Bitcoin as digital gold.“
Grayscale’s record figures mark a turning point for Bitcoin, demonstrating that the „smart money“ has finally recognised the cryptocurrency as a hedge against inflation and a store of value in 2020. This narrative was one of the driving forces that lifted Bitcoin almost to US$42,000 in January.
Increased adoption by institutions is paving the way for Bitcoin’s mass adoption, as Jeff Currie of Goldman Sachs also confirms. However, the financial expert still sees a long way to go for the cryptocurrency until then.
With Joe Biden’s administration taking office in the coming days, another Corona aid package could soon be passed, which could play into Bitcoin’s favour.