The 4th quarter earnings report for the Grayscale Investments digital asset management fund is out this week and Grayscale has had the best performance yet in the midst of a bear market.
Released on Friday, February 15th, the earnings report shows that capital inflows from institutional investors are on the rise, a trend that caused Grayscale to declare the “return of the Bitcoin Maximalist.” The fund, which runs the index fund called GBTC saw its investments shoot 300% in 2018 to $359 million in comparison to its 2017 earnings report.
In its 4th quarter, the digital asset management firm raised as much as $30.1 million in investments averaging about $2.3 million each week. This was the lowest quarter in 2018 as the general market was experiencing a bear market. Capital inflows averaged $6.9 million per week throughout the year, signaling the fall in capital investments as the year progressed.
Despite the downtrend, this was still a stellar performance for a digital assets firm considering the bear market took a toll on several high profile firms in the industry-leading most to downsize and several others to close shop all-together. In the words of Michael Sonnenshein, Grayscale’s Managing Director,
“It was by no means our best quarter, but it’s certainly important to recognize that despite the price declines investors were actively engaged.”
It is worth noting that the firm does not just run a Bitcoin-only investment fund but most of the capital inflow was geared towards investing in the GBTC product. Close to 88% of the total 018 investments were Bitcoin-related investments while the remaining were distributed throughout the other products.
As noted in the report,
“Return of the Bitcoin maximalist. Grayscale Bitcoin Trust (f/k/a Bitcoin Investment Trust) stood out this quarter, attracting the most capital within the Grayscale family of products despite further price declines in the digital asset market. In the fourth quarter, 88% of inflows were into Grayscale Bitcoin Trust, while 12% were into products tied to other digital assets.”
The company does also believe that despite the disproportionate interest in the Bitcoin product, the demand for other digital assets is also on the rise which could signal a further rise of the non-Bitcoin investment products in the future.
“Despite a slowdown in investment across products in the fourth quarter, we continue to see evidence that digital assets are here to stay as a new asset class. Moreover, we believe in a future where multiple digital assets survive, thrive, and complement one another in the digital economy, allowing them to play a diversifying role within investor portfolios,” the report said.