Bitcoin Institutional Investment On The Rise

In recent days, the growing support for bitcoin being taken seriously appears to be growing with Grayscale Bitcoin Trust leading the way. The Block Crypto noted that the financial institution was a $1.4 billion closed-end fund that dealt mostly in bitcoin investments. That, if anything, was as strong an indicator as any of institutions recognizing the strength of bitcoin as an asset.

GBTC only accepts 'accredited investors' who can commit to a minimum investment of $50,000. That accounted for about 80% of all investments in 2018, according to the firm, with 66% coming from institutional investors and 14% coming in from accredited ones. The firm makes it a point to let investors know what they're getting in, providing them with a knowledge of bitcoin as well.

That knowledge is imparted through a 'traditional investment vehicle' with shares under the investors' name. Xapo, meanwhile, holds the coin for Grayscale. They charge the company a ratio of 2% as 'expense' with the fund value gradually losing out in the process. The business is booming, if Grayscale's data is to be believed--over $52 million fees from GBTC has been collected so far.

All the institutional rush appears to be the reason behind bitcoin's bull run as well, according to News BTC. It was institutional buyers which were behind that surge that propelled the bitcoin price up to 23%, according to the report, and the systematic buying was two-fold; it wouldn't have happened if bitcoin didn't show signs that it was well-positioned for another good, if not great, run.

Alex Kruger delivered the analysis and said that institutional buying happened when people--belonging to a corporation or institution--got together to purchase an investment before it gets out of their reach. Retail investors simply didn't have the capital, he continued, and said that they simply didn't have anything that could pump bitcoin prices up.

It was also likely, based on his views, that 'a handful of large players' got together instead of people. It was what drove bitcoin's valuation far greater than it would've been. Kruger continued by saying that the clues can be seen through the volume of buyers, the price paid, the action, funding, and the futures' basis of the transactions.

So it goes without saying that institutions have also entered the game. With large corporations looking into bitcoin and other new players joining the field, it appears that the future will have serious corporations--used to trading in real-world currency--also beginning to take a look at trading bitcoin when they can, where they can.

© 2019 Business Times All rights reserved. Do not reproduce without permission.
Loading...
Sign Up for Newsletters and Alerts