Crypto fund reveals growing institutional interest in Bitcoin

28 Apr, 2019 | Updated: 28 Apr, 2019
by Richard Allen
Adoption
Crypto fund reveals growing institutional interest in Bitcoin

The recent news regarding the Tether/Bitfinex scandal may have scared off some skeptics, but the larger crypto market remains relatively unaffected. A recent tweet by the chief executive of Digital Currency Group has reinforced this.

According to Silbert, one of Digital Currency Group’s child companies, Grayscale recently raised over $20 million for its family of funds, which includes the Bitcoin trust (GBTC). This represents the highest weekly raise since 2017.

As EthereumWorldNews reports, while this doesn’t sound like the largest sum of money in the grand scheme of things, it’s important to take note of fiat amplifiers – buying $1 worth of BTC is believed to increase market cap by more than $1. According to data compiled by Alex Kruger, JPMorgan claims that for cryptocurrencies, there’s currently a fiat amplifier of 117.5. This has been demonstrated by an increase in Bitcoin’s market cap from $15 billion to $250 billion after a net inflow of $2 billion.

This amplifier has been contested, however, as Citigroup believe an amplifier of 50 is more accurate, while Chris Burniske of Placeholder Ventures calculated the figure to be somewhere between two and 25.

It’s important to take note of those investing in Grayscale’s funds. According to the company’s 2018 Digital Asset Investment Report, 66% of the capital inflow received during 2018 came from institutional investors, which Grayscale state are “building core strategic positions in digital assets.” This hints at increasing interest from large-scale investors.

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Read more about: Bitcoin (BTC)

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