Grayscale Reports a Record $500 Million Q1 Inflow Amidst Economic Downturn

Grayscale Investments, cryptocurrency asset management company, draws $503.7 million investment in Q1, the largest quarterly rise in its history. Increasing investment into Grayscale may suggest a growing market interest in cryptocurrency as global economy hit by Coronavirus pandemic.

Grayscale released its Digital Asset Investment Report for the first quarter of 2020 on April 16. As addressed in a report on Cointelegraph, the firm now holds 1.7% of the circulating supply of Bitcoin.

As the world is hit by the COVID-19 pandemic, the global economy is seeing its biggest crisis since the Great Depression, as stated by the IMF. Increasing investment into Grayscale at this moment may suggest a growing market interest in cryptocurrency.

According to a report on the Block, Grayscale’s managing director and board member, Michael Sonnenshein, has revealed in an interview that 90% of the inflows used to come from institutions, which includes hedge funds, crypto-native investors, family offices, and more. However, the first quarter of 2020 has witnessed a growing variety of clients. Sonnenshein said that over 46.5% of Q1 investment came from multi-strat investors. The expansion of the investor category may not tally with a general impression of bitcoin being detached from the broader market. 

Correlation between hourly returns of SPX500 and BTC also climbs up to its annual height this March, which further proves a growing connection between cryptocurrency and broader markets. For ordinary investors, cryptocurrency may be becoming an alternative to safeguard their investment in the middle of the instability of fiat currencies.

By Dawn Wu

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