The term ‘buying the dip’ has been floating around the crypto-verse ever since Bitcoin (BTC) showed signs of reaching the $5,800 levels late in May this year. As many inexperienced traders were panicking, the true veterans kept emphasizing that rather than cashing out, anyone with extra capital should be investing in Bitcoin (BTC) and the other numerous cryptocurrencies while their prices were at their lowest in the past 6 months.
A new report by Grayscale Investments provides a clear picture as to where new capital is coming from in the crypto-markets during the mentioned time period of a ‘shaky’ Bitcoin. Grayscale Investments is a global leader in digital currency investing and the firm provides single-asset as well as diversified investment products for its clients.
The firm has released a 6 month report that analyzes the inflows of capital into its investment products starting December 31st last year, to June 30th 2018. Within this time period, a total of $250 Million was invested in digital assets by the firm’s clients. The average weekly investment was $9.55 Million. Of this weekly investment, $6.04 Million went to a Bitcoin Investment trust. The rest of the funds per week ($3.52 Million) went to non-BTC investment products.
The non-Bitcoin investment products include: Bitcoin Cash Investment Trust, Ethereum Investment Trust, Ethereum Classic Investment Trust, Litecoin Investment Trust, XRP Investment Trust, Zcash Investment Trust, and Grayscale Digital Large Cap Fund, LLC.
The firm also clearly highlighted that 56% of the new capital ($250 Million) during this time period came from Institutional investors. 20% came from Accredited individuals; 16% from Retirement accounts; and 8% from Family Offices. The chart below from the same report gives a clear picture of these percentages.
According to the report, the average investment was $848K for institutional investors, $553K for family offices, $335K for retirement accounts, and $289K for individuals. Of these new investors, 64% were from the United States; 26% from Offshore Investors (e.g Cayman-domiciled entities); and 10% from Other investors.
The report goes on to issue the following conclusion with regards to the report:
We’re excited to share this report for two major reasons:
- We believe it provides an alternate, yet accurate, firsthand perspective on digital asset market activity that is distinct from what is commonly understood.
- It may be useful to both value and momentum investors as they seek to identify investment opportunities where there are (i) dislocations between market prices and fundamentals and (ii) strong, steady capital inflows.
We intend to regularly update this report to identify trends in the digital asset investment landscape.
It is with the above conclusion from Grayscale Investments, that it is safe to also conclude that new money into the crypto-markets is indeed coming from the highly anticipated Institutional Investors.