Grayscale’s Bitcoin Trust now holds over 500K BTC

on Nov 17, 2020
  • Reportedly, the fund manager now holds approximately 2.69% of BTC’s outstanding supply.
  • Over the past six months, Grayscale’s Bitcoin Trust has expanded by approximately 50%.
  • In the past week, the firm recorded the highest-ever weekly inflow of BTC.

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Grayscale Investments, a crypto fund manager now holds more than 500,000 BTC in its Bitcoin Trust. The firm disclosed this news via a tweet on November 16. Reportedly, these funds are worth £6.31 billion, equating to 2.69% of BTC’s remaining supply and market capitalization. However, Chainalysis, a blockchain analytics firm estimates that approximately 3.7 million BTC is lost, meaning Grayscale might be holding 3.37% of BTC’s remaining supply.

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The firm’s tweet read,

“Grayscale Bitcoin Trust now holds more than 500,000 $BTC. Yes, you read that right. Learn more about the world’s largest #Bitcoin investment product.”

This news comes as the firm’s Bitcoin Trust continues amassing BTC significantly since the start of 2020. Just last week, the firm announced that it had recorded its largest weekly inflow of BTC to date. According to Grayscale, investors entrusted it with 15,907 BTC worth £162.5 million at the time.

Apart from this, the company unveiled that over the past six months, the amount of BTC in its fund surged by approximately 50%, seeing as it reportedly held 343,954 BTC in May this year. This figure marks a steep rise in a short period, considering Grayscale has been operational for seven years now. Per analysts, this rapid growth indicates increasing institutional interest in the crypto sector.

Reasons behind Grayscale’s success

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Grayscale Investments targets institutional investors that are willing to pay a premium to buy and hold BTC through a regulated fund.

In its website, Grayscale prides itself as being the first publicly-quoted Bitcoin investment vehicle and the first digital currency investment vehicle to attain the status of an SEC-reporting company.

Apart from being regulated, the firm claims that it has the support of trusted network providers Davis Polk & Wardwell LLP and Friedman LLP.

Regarding the security of investor funds, Grayscale notes that,

“Grayscale Bitcoin Trust’s assets are stored in offline or “cold” storage with Coinbase Custody Trust Company, LLC, as Custodian. The Custodian is a fiduciary under § 100 of the New York Banking Law and a qualified custodian for purposes of Rule 206(4)-2(d)(6) under the Investment Advisers Act of 1940, as amended.”

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