The cryptocurrency space has been on the rise in the mainstream as regulations, governments, and traditional institutions have come to normalize and legitimize much of the space.
This year the planet has faced a worldwide pandemic, and therefore the traditional markets and economies around the planet had to undertake and affect this unprecedented event. It’s also been a year that appears set for greater interest in cryptocurrency investment.
The cryptocurrency battlefield is getting increasingly crowded. This space is witnessing an increasing amount of attention being cast from multiple institutional investors.
According to Evertas survey, institutional investors plan to significantly increase their stakes in Bitcoin (BTC) and other digital assets in the future.
New research amongst institutional investors who collectively help manage USD78.4 billion of assets, reveals that over the next five years 26 per cent believe pension funds, insurers, family offices and sovereign wealth funds will ‘dramatically’ increase their level of investment in cryptocurrencies
Prominent Institutional Investors Profited in 2020
Grayscale Bitcoin Trust — 2.14%
Grayscale Investments is, perhaps, an unsurprising pacesetter in this regard. Through its Bitcoin fund (GBTC), which owns and tracks the worth of bitcoin, the New York-based firm now holds 449,596 BTC, valued at $5.1 billion currently, and representing 2.14% of the digital asset’s total circulating supply.
Listed on the OTCQX market, the Trust has snapped up 70% of all newly minted bitcoin in 2020, almost doubling its portfolio within the process.
Grayscale’s bitcoin trust “became the primary publicly quoted securities solely invested in, and deriving value from, the worth of bitcoin”
The corporation operates ten crypto investment products focused on institutional investors. Funds cover ethereum (ETH), bitcoin cash (BCH), zcash, XRP, and more.
Microstrategy Inc. — 0.18%
Grayscale could also be a pioneer, but it’s Microstrategy that’s grabbed all the headlines in recent weeks. The Nasdaq-listed company, which develops mobile software also as providing cloud-based services, bought $425 million worth of bitcoin in August and September, making BTC Microstrategy’s main reserve asset.
The multi-billion-dollar U.S. firm now holds a complete 38,250 BTC, during a move that signals increasing corporate adoption.
At current exchange rates, the portfolio is worth quite $433 million – a gain of $8 million, coming because it does against a backdrop of increased stimulus spending that has sent global fiat currencies into a tailspin. Microstrategy CEO Michael Saylor is especially upbeat.
“This investment reflects our belief that bitcoin, as the world’s most widely adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash,” he says.
Square Inc. — 0.022%
Corporate adoption might not be considered a trend just yet, but news that Jack Dorsey’s Square Inc. moved one-hundredth of its total assets into bitcoin suggests something could also be built up.
On Oct. 8, the NY Stock Exchange-listed mobile payments firm announced it spent $50 million buying 4,709 bitcoin.
Amrita Ahuja, chief treasurer of Square, claimed “bitcoin has the potential to be a more ubiquitous currency within the future”.
On this account, the corporation intends that
“As it (bitcoin) grows in adoption, we shall learn and participate in a disciplined way. For a corporation that’s building products supporting a more inclusive future, this investment may be a tread on that journey.”
Bitcoin reacted positively to Square’s news, soaring 8% within the last 72 hours to quite $11,300 from $10,500. With a market capitalization of over $83 billion, Square provides software and hardware payment solutions.
In 2019, the firm reported revenue of $4.7 billion.
Influencer’s View on Institutional investors
Recently, Paul Tudor Jones praised Bitcoin for its potential as a speculative asset, stating he invests a small percentage of his portfolio in the coin, but expects it to be the best performer.
VP of Huobi Global Markets, Ciara Sun,
“Huobi has seen an influx of traditional and institutional traders join our platform and take advantage of the Huobi Futures market place. As of May 6, Futures and Swap Trading Volume at Huobi topped $5.2 billion, with 24-hour perpetual swap trading volume hitting $2.2 billion — this is off a product that was only launched in April.”
According to Huobi, what is most interesting to see is that the Institution trading percentage on Huobi futures is estimated to be as high as 30 to 40 percent.
The trend seems to suggest that more institutional clients are getting comfortable investing in the new asset class. Coinbase noted that :
“Greater visibility of reputable investors warming up to digital assets” is also sending a positive signal for other investors as it could help inspire “confidence among this community.”
For example, the hedge fund Tudor Investment Corporation disclosed in May that it took positions in Bitcoin (BTC). The announcement also coincided with reports that came out at that time saying the hedge fund’s CEO Paul Tudor Jones argued BTC to be a better hedge against inflation.
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