The gray scale of Bitcoin giant whale and the crypto investment fund industry behind it


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On November 27, Grayscale CEO Barry Silbert tweeted a short tweet “Okay, it is time”, which subsequently caused heated discussions in the market.

While the price of Bitcoin has been rising in recent months, many people have noticed the giant whale “Grayscale” that has been buying Bitcoin in an orderly manner.

Grayscale is an American crypto asset investment management company established by the Digital Currency Group (DCG) in 2013 to serve institutional investors and high-net-worth qualified investors through compliant fund operations.

The so-called “qualified investor” refers to an individual with an annual income of at least US$200,000 (or a combined income of US$300,000 with a spouse). And alone or jointly with a spouse owns a net worth of more than US$1 million (excluding residential real estate), or holds a US financial professional certificate (Series 7, Series 65, or Series 82); for institutions, it needs to have 5 million Liquid assets above USD, or all shareholders are qualified investors. Grayscale’s “qualified investor” setting reflects that it pays more attention to the reasonable allocation of encrypted assets rather than the rise and fall of the price of encrypted assets, because the scale and volume of assets managed by Grayscale for institutions and high-net-worth clients are generally higher The asset management cycle is relatively long.

Grayscale’s most famous product is Grayscale Bitcoin Trust (GBTC).

The operation mode of GBTC is similar to that of gold trust funds: large gold producers consign physical gold to fund companies, and then fund companies use the physical gold as a basis to publicly issue fund shares on the exchange and sell them to various investors, commercial The bank acts as the fund custodian bank and the physical custodian bank respectively, and investors can redeem freely during the fund’s duration. The difference is that GBTC’s share does not support redemption and needs to be locked for 12 months, so Grayscale has become a “Pixiu” that can only enter and cannot exit.

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In addition to Bitcoin trust products, Grayscale has also developed trust investment products based on other encrypted assets, and the types of encrypted currencies it holds are very diverse. According to data from Tokenview, Grayscale has gradually expanded its trust-custodial encrypted assets to BTC, ETH, ETC, LTC, BCH, XRP, ZEC, ZEN, XLM, etc., since the launch of the Bitcoin Trust in September 2013. category. Among them, as of November 26, Grayscale’s holdings in Bitcoin (BTC) and Ethereum (ETH) reached 532,400 and 2,635,100 respectively, accounting for 2.87% and 2.32% of the two major currencies.

The main customers of Grayscale’s various encrypted asset trust investment products are institutional customers. For these institutional investors, they will be subject to a series of risk control, regulations, tax and other issues during the investment process. Compared with direct investment in encrypted assets, investing in compliant encrypted asset trust products in Grayscale is relatively safe. s Choice. Especially in the context of high inflation expectations, global investors are striving to find asset allocation solutions that can effectively hedge, and the gradual maturity of the cryptocurrency market has made more and more institutions begin to recognize related investment products as alternatives. The value of investment for asset allocation. It can be said that 2020 is the first year when institutional funds really begin to flow into the encrypted asset market.

The high volatility and high returns of the encrypted asset market attract the attention of many types of investors, while also creating considerable opportunities and operating space for investment management institutions in this field.

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Generally speaking, the crypto asset investment management industry can also be referred to as the crypto investment fund industry. According to data from Crypto Fund Research, there are currently more than 800 crypto investment funds in the world. Among such a large number of crypto investment funds, crypto venture capital funds and crypto hedge funds account for more than 95%, and only a small part are passive indexes. Funds, private equity funds or other types of funds.

The biggest difference between crypto venture capital funds and traditional venture capital funds is that they focus on investing in blockchain and cryptocurrency projects and start-ups, while crypto hedge funds are funds that use various investment tools and methods to directly invest in crypto assets ( Typical organizations include the Amber Group that we previously reported). What needs to be pointed out here is that, depending on the product and the investment field involved, the crypto investment fund institution can be both an encrypted venture capital fund and an encrypted hedge fund, or we can call such an institution a hybrid crypto investment fund (for example, Qianfeng Capital).

Since crypto hedge funds directly invest in the cryptocurrency market, they have a more direct impact on the market than crypto venture capital funds. According to the crypto hedge fund report jointly issued by PricewaterhouseCoopers and Elwood, the market size of crypto hedge funds has exceeded 2 billion U.S. dollars by the end of 2019, and the average asset management scale exceeds 44 million U.S. dollars. The median return on investment of crypto hedge funds in 2019 The number exceeds 30%. Most (about 48%) crypto hedge funds apply quantitative operation strategies for investment management. The types of crypto assets invested are still mainly Bitcoin and Ethereum, accounting for 97% and 67%, respectively. Finally, the main service groups of crypto hedge funds are family offices (48%) and high-net-worth individuals (42%).

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