Grayscale now owns 50% of all Ethereum mined in 2020

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Written on Apr 27, 2020

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Digital asset manager, Grayscale, recently purchased nearly 50% of all Ethereum mined in 2020.
The company hinted at the reasons behind the move, such as the upcoming Ethereum 2.0.
However, a much more important reason is massive interest coming from institutional investors.

Grayscale Investments, one of the leading firms in the digital asset management sector, just purchased half of all ETH that was mined in 2020. The company’s explained its move by pointing out the increased interest from institutional investors. However, it also hinted that it expects the soon arrival of Ethereum 2.0.

The next phase of Ethereum’s blockchain would certainly bring more interest from institutions and other entities. Naturally, Grayscale would be one of them.

Why did Grayscale buy 50% of all ETH mined in 2020?

According to available information, the total number of mined Ethereum this year sits at 1,563,245,875 ETH. Now, Grayscale Investments Ethereum Trust (ETHE) also reveals how many shares it issued at different points in time.

The data shows that it issued around 5,230,200 shares on December 31st, 2019. Only four months later, on April 24th, 2020, that number surged to 13,255,400.

With 0.09427052 ETH per share, this would indicate that this period saw the purchase of 756,239.777 ETH. This, in turn, means that the company purchased exactly 48.4% of all ETH mined this year.

According to the paper describing the company’s performance in the first quarter, it seems that institutions are becoming more and more interested in ETH. They accumulated significant portions of ETH in the last few months, despite volatility and the market crash.

In fact, the Ethereum Trust saw $110 million in inflows. Meanwhile, the total sum of all the inflows in the past two years combined is only $95.8 million. In other words, yes, the interest in Ethereum is definitely skyrocketing among institutions.

Ethereum awakens interest before the big changes

Meanwhile, Ethereum 2.0 approaches as well. Once it happens, it will forever shift Ethereum away from PoW and towards PoS. Some have suggested that this might also be a big reason why institutions may have developed such strong interest.

Now, investors continue to purchase ETH through Grayscale. A few days earlier, on April 24th, the cost of each ETHE share sat at $92. Meanwhile, the holdings per share were at around $17.70.

In other words, institutions were not discouraged even when they had to pay a major premium. As long as they did not have to worry about managing, storing, or transferring coins, they are happy to pay someone else to do it.

As for Ethereum’s spot price, it also saw a significant growth or approximately 50% in the last four months. The coin started the new decade with a price of $130. Now, however, its value climbed to $195. Of course, there were moves up and down, and the coin saw the height of $290 and depth of $87 this year. But, it is once more moving in a positive way, although it still has some major resistances to pass in the near future.