Biggest Bitcoin nondepository financial institution Hits Massive $1 Billion Year—As BlackRock Investors Flee



Bitcoin interest from institutional investors is booming with the world's largest bitcoin nondepository financial institution, Grayscale, posting record inflows for the primary quarter of the year.

New York-based Grayscale, which allows accredited investors to buy for bitcoin and other major cryptocurrencies through its funds, saw over $1 billion invested over the last 12 months—with just over half a billion dollars ($503 million) coming within the primary three months of this year.

Massive interest within the Grayscale Bitcoin Trust, Grayscale's biggest and flagship fund, comes as BlackRock, the world's largest asset manager, revealed panicked investors fled its long-term investment for the first time in five years half-moon.

"For the primary time, inflows into Grayscale products over 12 months crossed the $1 billion thresholds, showing strong and sustained evidence that investors are increasing their digital asset exposure at current levels," Grayscale wrote in its half-moon of 2020 investment report.

“Many of our investors view digital assets as a medium-to-long-term investment opportunity and a key component of their portfolio. They use withdrawal tactics to expand their exposure to the asset class, which they are doing right now at the fastest pace in the history of grayscale. Flows doubled from quarter to quarter. Somewhat to $ 503.7 million, which indicates that demand is reaching new peaks, even in a "risk-free" environment.

Grayscale's latest quarterly rise of just over half a billion dollars is almost double its previous quarterly high of $254 million within the third quarter of last year, with new investors accounting for $160 million of the cash raised.

Meanwhile, Grayscale's Ethereum Trust also recorded quarterly inflows of $110 million.

In January, Grayscale's managing director Michael Sonnenshein declared "institutional money has now arrived" in bitcoin and crypto markets.



Elsewhere, managers of traditional assets struggled during the historic first quarter of 2020.

Institutional investors withdrew about $31 billion from BlackRock's mutual funds and exchange-traded funds during the first three months of the year because the first 2020 market did a 180 degree end up to be full-on financial meltdown thanks to the coronavirus crisis.

"Even BlackRock isn’t proof against a market downturn," Kyle Sanders, an analyst at Edward Jones, said during the note to clients following BlackRock's latest statement.

Markets and economies around the world have stalled as lockdowns designed to halt the spread of the coronavirus COVID-19 drag on with the U.S S&P 500 Index losing a staggering 20% within the three months to March 31.

The bitcoin price has outperformed most major markets, however, and is currently a more-or-less flat at the start of January.

"It’s been a rough start to the new decade for nearly all risk assets and currencies as a result of the coronavirus pandemic," Grayscale said alongside its latest numbers.

"As the virus gained momentum in March, disrupting markets and economies across the planet, the clear winning trade has been 'long volatility,'" Grayscale said, highlighting a 289% gain for the Vix Index, a preferred measure of the stock market's expectation of volatility supported S&P 500 index options, during the primary quarter of the year.




Before the market turmoil caused by the coronavirus pandemic, several strong blows within the Bitcoin community and cryptocurrencies were optimistic about Bitcoin's outlook for this year - with the next half of bitcoin considered a potential positive catalyst.

Bitcoin is set to see its own currency reward for so-called miners who keep the Bitcoin network down from 12.5 bitcoin per block to 6.25 on May 13.

There have been two types of bitcoins since the Bitcoin coin was created in 2009, one in 2012 and the other in 2016. Bitcoin pauses are to continue approximately once every four years until a maximum of 21 million bitcoins is created by the network - which is Something that is not expected to happen until the next century.