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  • Ray Sharif-Askary, a Grayscale exec, said that financial institutions had poured $1.7 billion into Grayscale’s crypto funds.
  • The firm has $3.8 billion in assets under management as of June.
  • The average weekly investment across Grayscale’s crypto trusts has surged more than 800% over the past year.

Ray Sharif-Askary, the director of investor relations at Grayscale, said that hedge funds and other financial institutions had poured $1.7 billion into Grayscale Investment’s crypto funds. In a recent podcast, host Nisa Amolis noted that the firm has $3.8 billion in assets under management (AUM) as of June. This marks a significant jump from the $2.1 billion AUM in May 2019 and $2.2 billion AUM in March 2020.  

Over the past year, the average weekly investment across Grayscale’s crypto trusts has surged over 800%. It increased from $3.2 million per week in 2019 to nearly $30 million per week in 2020. When asked about the sudden surge in interest, Sharif-Askary said that 2020 had been a year of macro instability and unprecedented monetary stimulus. She added that institutions are looking for alternative hedges to cope with the emerging crisis. 

This has been a record year—a record quarter for us. Candidly, we’ve never seen demand like this before for our products. 

She said that out of 90% of their clients come from institutions, 44% are multi-strategy hedge funds and another significant portion comes from long/short hedge funds. The podcast host Nisa Amolis asked Sharif-Askary if the exposure occurred in the form of “401k plans,” as has been the trend since Grayscale started operations in 2013. In response, she said that “tax-advantaged accounts have always been one of and will continue to be one of” the primary vehicles for sophisticated investors as Bitcoin is “not set up to fit within the operational and legal frameworks of investors.” She added: 

At the end of the day, our investors are looking to gain exposure to digital assets in a form that doesn’t make them have to buy and store to custody these assets on themselves.

In the past year, $390 million from these investors went into Bitcoin, while $110 million went into Ethereum. Sharif-Askary further added that Grayscale’s clients are increasingly diversifying into altcoins. She credits the growth to the “policy implications of COVID-19.” After all, institutional investors, like others, are interested in securing scarce assets that “could be used as an inflation hedge in a world where we’re faced with unprecedented monetary stimulus,” she said.

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