The latest halt comes as the six-month lock-up period for selling the recently purchased shares of the Grayscale Bitcoin fund comes to an end. Also, it comes as Grayscle’s total assets under management (AUM) crossed $15.7 billion.
On Monday, December 21, digital asset manager Grayscale temporarily paused any fresh investments into its Bitcoin (BTC) and Ether (ETH) trusts. The latest decision comes amid Bitcoin (BTC) entering a correction slipping below $22,000 levels on Monday.
However, the BTC price has recovered from the Monday lows and is currently at $22,679 with a market cap of $421 billion. Apart from Bitcoin (GBTC) and Ethereum (ETHE) trusts, Grayscale has also paused inflows for its other trusts and funds like Bitcoin Cash (BCHG), Ethereum Classic (ETCG), Litecoin (LTCN), and its Digital Large Cap Fund (GDLC). As per the latest report, the total assets under management across all Grayscale products has surged past $15.7 billion.
12/21/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) December 21, 2020
The latest halt comes as the six-month lock-up period for selling the recently purchased shares of the Grayscale Bitcoin fund comes to an end. Speaking to the Decrypt publication, Corey Law, a spokesperson for Grayscale said:
“We’re just at that point in the year where those windows the public window will be closing. And then the private window will be open”.
This can possibly have implications for the overall Bitcoin community as Grayscale has been a leading purchaser of BTC over the last few months. Since June 2020, Grayscale has purchased nearly 200K BTC until now. As institutional investments accelerate, the Grayscale Bitcoin Fund has seen inflows at $1 billion on a month-on-month basis.
JPMorgan: Institutional Inflows Crucial for Bitcoin (BTC) Price Movement
Grayscale’s announcement comes following the report from JPMorgan strategists that suggests that institutional inflows into Bitcoin funds are crucial for further price movement. As reported by Bloomberg, the JPMorgan strategists have specifically hinted at the spectacular growth of the Grayscale Bitcoin Trust (GBTC) – from under $2 billion to above $13.1 in AUM, all in one year only.
The strategists noted that although some might call Bitcoin in the “overbought” region, the flows into the trust “are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics”. Any slowdown in this funds inflow can risk a major correction in Bitcoin ahead. JPMorgan believes that the correction could as steep as during the second half of 2019 when the BTC price crashed 44%.
Although not through GBTC, institutional inflows in Bitcoin at a rapid pace. On Monday, business intelligence firm MicroStrategy announced an additional $650 investment buying around 29,000 BTCs.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.