Grayscale Experiences Full-Year Capital Inflow Despite the Bear Market

As investments into cryptocurrency reduced in the last quarter of 2018, Grayscale still found a way around it. The digital currency asset manager was able to achieve $359.5 million full-year capital inflows.
The Feb 14 investment report of Grayscale- a crypto management fund and subsidiary of Digital Currency Group- reveals that there is an increase in capital inflow from institutional investors.
The purpose of the investment report is to serve as a reminder of how companies have been able to stay in business amid the bear market that negatively impacted the crypto economy, making it lose over $700 billion worth of capitalization since Jan 2018.

The Main Points in the Report

The report showed that in the last quarter of 2018 there was a reduction in investments into digital assets, but in the same quarter, the firm was able to raise $30.1 million. The performance of the firm in the quarter was below average compared to the rest of the year.
In total, the firm recorded a capital inflow of $359.5 million in 2018, which became the firm’s best record since its establishment.The capital inflow of 2018 is almost three times that of 2017, when the crypto market performed at its optimum.
When the combined inflow from 2014-2017 is considered, it is observed that the figure is almost double of it. The report revealed that institutional investors played an active role in the firm’s 2018 inflows by providing 66% of it. According to the report;

“At the same, U.S. investors continue to be the firm’s main source of new investment as nearly all the investment in the last quarter came from them.”

Adoption of Digital Assets Will Keep Rising

The crypto industry has been subjected to a close examination in the past few months because of the falling prices of assets and regulatory ambiguity.
Nevertheless, Grayscale is confident that cryptocurrency is here to stay and will be instrumental in the diversification of investor portfolios.
“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,” a section of the report reads.
In December 2017, Bitcoin rose in price to the tune of almost $20,000, but since then its value has declined significantly.
Enthusiasts and investors were given a glimmer of hope when the report mentioned that, “ Bitcoin endured an 85 percent selloff between December 2013 and January 2015,” but succeeded to back bounce and hit its previous high of $1,150 which later rose to its all-time high.

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