Grayscale, a New York-based leading digital currency asset management firm, is pouring in large sums, not only in Bitcoin but also in smart contract pioneer Ethereum as according to data provided by Bybt, the firm is now managing $1.72 billion worth of Ethereum.
According to the reports, in the last month, Grayscale bought over $215 million or 365,560 ETH, adding 142,475 ETH just last week. According to December 14th data provided by Grayscale, Grayscale Ethereum Trust (ETHE) currently holds 1.72 worth of ETH with a holding per share price of $54.34. The price of the Ethereum token at the time of writing is $585.
The means that Ethereum Trusts (ETHE) shares represent about a tenth of each ETH in circulation, sold at a 128 percent premium.
With this increase in ETH holding, Grayscale has now a total of $12 billion worth of assets under management.
Ethereum is Rising as an Asset Class
The increased number of investors of Ethereum is showing that Ethereum is consolidating its position as a new assets class in 2020. With Bitcoin gaining great attraction from institutional investors, Ethereum is also broadening its appeal beyond a DApp-friendly platform.
This can be confirmed by Grayscale Investments managing director Michael Sonnenshein’s remarks who, in an interview with Bloomberg, said:
“Over the course of 2020, we are seeing a new group of investors who are Ethereum first and in some cases Ethereum only.”
The recent DeFi, of course, is the major factor behind the perception of Ethereum as a long-term investment. At the start of 2020, there wasn’t a significant amount of capital locked in decentralized finance (DeFi). According to DeFi Pulse, on January 1, 2020, the total value locked (TVL) on DeFi was $675 million, which has grown to nearly $15 billion as of today, December 15. The change in the perception of Ethereum from long-time cryptocurrency investors and analysts primarily derives from the growth of this DeFi.
Ethereum is currently trading around $600, well short from its February 2018 ATH of $937. While Bitcoin is approximately 170% up in year-to-date gain, Ether is up about 360% amid a boom in DeFi.
That is the reason that Grayscale ETH inflows went from $20.1 million in the fourth quarter of 2019 to $204.1 million in the third quarter of 2020. Among these large inflows, over 17% of inflows into the Grayscale Ethereum Trust were from new institutional investors, suggesting a strong institutional interest.
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