Grayscale: Institutional Investors Are Increasingly Seeking Exposure to Ethereum (ETH)
Solomon Odunayo
2 min read
Grayscale Investments that manages over $10 billion worth of various crypto assets has recently reported that institutional investors are increasingly seeking exposure to the famous smart contract platform, Ethereum, and most times only Ethereum.
Grayscale Ethereum Trust Keeps Gaining Investors’ Interest
Michael Sonnenshein, Grayscale Investments managing director, said in an interview with Bloomberg that before 2020, investors were notably asking for Bitcoin (BTC), but in the 12 months, Ethereum has managed to gain the interest of institutional investors.
Sonnenshein noted:
“Over the course of 2020, we are seeing a new group of investors who are Ethereum-first and in some cases Ethereum-only. There’s a growing conviction around Ethereum as an asset class.”
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Obviously, Grayscale Bitcoin Trust (GBTC) is the most popular with a weekly average of $39.5 million worth of investments in the last 12 months. However, its Ethereum Trust is also gaining popularity in the midst of a group of investors. According to Grayscale’s Q4 report, there has been a significant increase in the capital allocation of Ethereum Trust from institutional investors.
“Grayscale Ethereum Trust has garnered the attention of a new segment of Ethereum-focused institutional allocators. During 3Q20, over 17% of inflows into the Grayscale Ethereum Trust came from new institutional investors.”
Considering Grayscale’s report on 4th December 2020, the total asset under its management now stands at $12.6 billion, with Ethereum taking $1.6769 billion of the investments, while Bitcoin takes the majority.
In the third quarter of this year, the Grayscale Ethereum Trust has received weekly inflows of $15.6 million, far more than the second and first quarter with inflows of $10.4 million and $8.5 million respectively.
Although Bitcoin (BTC) has experienced notable price gains this year, Ethereum (ETH) also leveraged the boom of decentralized finance (DeFi) assets to make 2020 a memorable year.
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Sonnenshein further noted that the launch of Ethereum 2.0 serves as proof that the second-largest digital currency, Ethereum, is a resilient asset:
“The development of the asset class has continued to solidify itself. Ethereum has along the same lines of the staying power Bitcoin has.”
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