Crypto asset management firm Grayscale is buying the crypto market dry in leaps and bounds.
The influential crypto asset management firm now has more than $20 billion in crypto assets under its control, with its rate of Bitcoin (BTC) purchases currently three times that of „mining“ new BTC units.
As shown by crypto market researchers Coin98 Analytics on January 1, 2021, Grayscale bought up nearly three times all new Bitcoin in December 2020.
Miners can no longer keep up
In fact, Grayscale brought a total of 72,950 BTC ($2.312 billion) into its management, or assets under management (AUM), last month alone. During the same period, bitcoin miners „only“ added 28,112 BTC ($821.7 million) to the market.
These figures are further evidence of what crypto experts call a „long-term shortage.“ By this, they express that large investors are immediately buying up all newly „mined“ Bitcoin and withdrawing them from the available circulating quantity by storing them in cold wallets for the long term. Thus, the tradable quantity is not just shrinking temporarily, but is getting progressively smaller.
As Cointelegraph had reported, this phenomenon was already evident in November, after which demand from Grayscale and other institutional investors increased significantly again in December.
Mined and bought bitcoin compared for December 2020. source: Coin98 Analytics/ Twitter.
Grayscale owns more than $20 billion in crypto
Grayscale CEO Barry Silbert celebrated the start of the new year exuberantly by pointing out that his company now manages more than $20 billion in assets in its crypto investment funds. A year ago, that figure stood at $2 billion.
Grayscale crypto assets (as of Dec. 31, 2020). Source: Grayscale/ Twitter
The asset management firm is Bitcoin’s largest institutional investor, as its $17.475 billion in BTC is by far the largest investment in the market-leading cryptocurrency. By contrast, major software developer MicroStrategy owns „only“ 70,470 BTC ($2.06 billion).
Crypto experts suspect that the Bitcoin price will be pushed up sharply by this development, as the rate of increase in the amount in circulation is fixed. So miners can’t mine any faster at all, which inevitably means that the price of Bitcoin will be pushed up, provided that demand from big investors continues and they create additional scarcity. Back in December, the market-leading cryptocurrency did not go down significantly again after its new record run, which could prove that the effects of this development are now being felt.