There is a famous saying that circulates in both finance and journalism circles, and it’s to “follow the money”. The idea is that if an individual can accurately track where money flow is going – it can lead to both profit in the finance world, and the “truth” of what is happening, in an investigative sense.
In a recent report, the digital asset management fund has some interesting information about institutional interest in the cryptocurrency sector. It appears as though institutional investment – which includes investments from entities such as banks, insurance companies, hedge funds, mutual funds, investment advisors, and more – in the crypto sector, is on the rise.
About The Report
The Grayscale report concludes that there are some important trends with regards to the cryptocurrency world. First and foremost, around ⅔ (66%) of the money flow with regards to Grayscale products comes from institutional investors. This is significant, given the fact that Grayscale describes itself as the “world’s largest digital currency asset manager.”
The report also points out that it seems that those that are investing are not investing for a short-term gain. This might indicate that these investors believe that we are either at or close to a bottom with respect to the cryptocurrency markets. Specifically, the report concludes that retirement accounts make up a significant percentage (40%) of “total demand of Grayscale products”.
For those that are unaware, Grayscale is an early player with regards to crypto asset management. Specifically, the firm has been overseeing cryptocurrency investments for over 5 years, since it was founded in 2013.
Some have criticized the fees associated with Grayscale, and there is no doubt that the firm has been affected by the cryptocurrency markets. The fact that institutional money is more interested in Grayscale shouldn’t come as much of a surprise, especially given the fact that Bakkt will be launched later this year. Many believe that this launch will lead to a massive amount of institutional money flowing into the sector.