Bitcoin worth $600 million was taken off the market as BTC price struggles to consolidate for a retest of $40,000. Notably, asset manager Grayscale added around 18 times more bitcoin than miners added to the supply within one day on January 18.
Multiple data sources confirm that Grayscale remains the largest institutional investor in the bitcoin market, and it acquired 16,244 BTC ($607 million) on Monday.
The huge sums are some of the largest on record and are an order of magnitude above what even Grayscale was trying in the past week. The firm has in the past recorded daily buys but it stopped over the holiday season and then reduced its allocation in the first week of 2021.
Monday’s buying spree brings Grayscale’s total assets under management (AUM) to about $23 billion. As reports show, the total AUM increased ten times in 2020. In that context, the CEO of UK-based crypto exchange CoinCorner, Danny Scott, tweeted:
“Grayscale were buying $251 M of #Bitcoin on avg per week in Q4 2020. Last week they did $700 M in 1 day… And today $590 M… Pay attention.”
Bullish On Bitcoin
The latest move by Grayscale underscores its growing faith in bitcoin as a long-term investment and that of institutional investors choosing bitcoin over any other form of macro asset.
Despite the mixed messages from fellow asset manager Guggenheim that is expected to start its bitcoin exposure later this month, reliable industry sources say that public announcements normally hide the true extent of institutional investment.
Sometime last week, Tyler Winklevoss, Gemini exchange co-founder, said:
“There is huge institutional demand, and most of it is silent.”
He was speaking while berating gold bug Peter Schiff for alleging that players were mostly not interested in Bitcoin.
Data acquired from on-chain analytics resource CryptoQuant in the meantime shows some changes in Grayscale’s buying habits. Late 2020 saw the biggest short-term increase in bitcoin holdings for the year.
Previously, analysts at JPMorgan insisted that inflows into the Grayscale Bitcoin Trust (GBTC) would have to maintain $100 million daily for the BTC price to retest the $40,000 levels.