Grayscale’s enormous crypto asset trusts are now bigger than the economy of Bahrain, it has emerged.
The firm’s reputation is grounded in the famous Grayscale Bitcoin Trust – an investment vehicle that provides more traditional investors portfolio exposure to BTC.
But booming NFT markets have seen Ether prices surge almost 100% over the past six weeks in a wild and unabated rally. With the asset now pushing resistance in an all-time high range (ATHs), the lesser-known Grayscale Ethereum Trust has risen to prominence.
An updated report released by Grayscale last Friday reveals Ethereum now represents the second-largest asset holding in the company’s portfolio, and following the summer price dip there is now 3,000,000 Ether (ETH) in Grayscale’s custody.
3,000,000 ETH is valued at about $12B at the time of writing. It has been reported that the company made $3B in gains during the recent Ethereum price rally.
Bitcoin remains backbone
The company’s report also revealed it had reached a whopping $47 billion in digital assets under management, making the firm more valuable than Bahrain.
Bitcoin (BTC) remains the backbone of the Grayscale investment holdings, with $32B under management. It is the largest collection of institutional BTC spot positions in the world and accounts for around 3% of global circulating supply.
The Bitcoin Trust is primarily used at an institutional level as a means of investing in BTC without actually holding it, with the Grayscale shares representing the value of the underlying Bitcoin. GBCT traditionally trades at a premium to the native asset value (NAV) pricing for BTC but, so far, 2021 has seen a persistent discount relative to the NAV.
Fear, uncertainty and doubt (FUD) took hold earlier this year, as investors feared the first Grayscale unlocking event would induce a sell-off. Whilst this contributed to the BTC price correction in June, it appears to have widely taken place without any real impact.
The table above also shows that the firm holds a plethora of alternative assets, demonstrating an increased diversification of crypto holdings, showing significant funds for Bitcoin Cash (BCH), Litecoin (LTC), Stellar Lumens (XLM), and Zcash (ZEC).
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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.