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Grayscale Capital Launches ‘Bitcoin is the New Gold’ Campaign

Grayscale Cryptocurrency Bitcoin Gold 2019

As Bitcoin steadily approaches $5500, staging a moderate recovery following last week’s crash in pricing, a cryptocurrency investment firm is set to launch its new media campaign.

While Bitcoin has routinely been compared to gold, with the original cryptocurrency likened as ‘digital gold’ throughout its history, Grayscale Capital is taking that moniker to a new level. On May 1, the investment company began a marketing and twitter campaign, using the tag #DropGold, in an effort to broaden the appeal of cryptocurrency to institutional and traditional investors. Grayscale is targeting an investment base that looks to gold for both price stability and long-term store of value.

With a number of Wall Street analysts predicting a market recession for U.S. and global economies in the next several years, gold is likely to make a resurgence, as precious metals have traditionally performed well during periods of stock market uncertainty. However, Grayscale’s new campaign seeks to supplant gold as the predominant asset for storing value, insteads stating its goal is to make, “investment portfolios to reflect that bitcoin has become digital gold for today’s forward-thinking investors.”

Barry Silbert, founder and CEO of Digital Currency Group and its subsidiary cryptocurrency investment firm Grayscale Investments, explained that Bitcoin is far more appealing to the modern generation (millennial) investors and that gold is largely an asset of the past,

“There is a generational shift in how individuals are approaching investing. We strongly believe that investments in gold will be reallocated to bitcoin as Baby Boomers begin transferring their wealth to a younger generation of investors, one that wasn’t raised on the gold standard.”

Silbert continued,

“The gold industry has done a fantastic job of marketing an overpriced metal but bitcoin has superior physical properties and market utility. I believe that bitcoin will become the store-of-value for our digital age.”

The CEO’s comments reflect the belief of other market analysts that the flow of wealth from Baby Boomers to their, through both inheritance and a general receding of market investment, will provide fortuitous for digital assets and the industry of cryptocurrency. Millennial and younger investors, as a whole, have embraced cryptocurrency to a greater degree than older investors.

Some have pointed out that the risk and volatility of cryptocurrency–thereby increasing the profit and returns to be made–is more appealing to younger and less well-capitaled investors. However, Silbert and Grayscale are banking on the belief that digital assets are more appealing to the modern generation, and are targeting gold as a potential transition for store of value investment. Grayscale’s Bitcoin Trust is reported to have 1.2% of the total bitcoin in circulation, giving the company a substantial stake in the future of the digital asset.

Despite historic volatility for Bitcoin and other top cryptocurrencies, Grayscale reports that the BTC should be considered as apart of a diversified portfolio. Bitcoin has a low correlation to traditional assets, which in turn could lead cryptocurrencies to offer risk-reducing benefits in the event of widespread market turn-down for stocks and bonds.

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Crypto Fund Reveals Abounding Retail, Institutional Interest In Bitcoin (BTC)

Investors Are Coming Back To Bitcoin

The Tether ‘FUDmay have scared off some skeptics, but there still seem to be investors flooding into the cryptocurrency market. According to a recent tweet from Barry Silbert, the chief executive of industry conglomerate Digital Currency Group, one of his firm’s child companies, Grayscale, has recently raised millions for its family of funds, which includes the ever-popular Bitcoin Trust (GBTC). In fact, Silbert, a Wall Streeter-turned-crypto and blockchain diehard, writes on Twitter that Grayscale secured $20 million in the past week alone, the highest weekly raise since 2017’s mania.

While this doesn’t sound like a large sum, especially considering that cryptocurrency’s market capitalization still sits at a hefty $172 billion, you would be remiss to forget fiat amplifiers (buying BTC with $1 is believed to increase market capitalization by more than $1). Per data compiled by analyst Alex Kruger, JP Morgan claims that for the crypto assets at large, a fiat amplifier of 117.5 is present, as a purported $2 billion in net inflow pushed Bitcoin’s market capitalization from $15 billion to $250 billion. But, this isn’t the whole story. Citigroup purportedly estimated an amplifier of 50, while Chris Burniske of Placeholder Ventures calculated the figure out to somewhere between two and 25. Considering a low-end amplifier of 10 times, the $20 million could have boosted Bitcoin’s value higher by $200 million, which is somewhat marginal yet still notable.

What makes this news even more important is the breakdown of who’s investing in Grayscale’s vehicles. According to the firm’s 2018 Digital Asset Investment Report, the 66% of the capital inflows it saw during fiscal 2018 came from institutional investors, who Grayscale claims are “building core strategic positions in digital assets.” So if this trend of institutional accumulation has continued, Grayscale is continuing to see abounding interest from this subset of investors—a clearly bullish sign.

Investment Interest May Continue

And this investment interest may continue with news that large corporations, ones that you likely interact with during your day-to-day life, are poised to delve into cryptocurrency and blockchain.

As reported by Ethereum World News previously, both E*Trade and TD Ameritrade are expected to soon offer spot cryptocurrency trading on their respective platforms, which serve 5 million and 11 million customers, respectively. Nathaniel Popper, a New York Times reporter, claims that the only thing holding back E*Trade at the moment is their inability to find a proper third party for digital asset custody. On TD Ameritrade’s side of things, the institution is purportedly waiting for ErisX, an up-and-coming cryptocurrency platform that has been likened to Bakkt, to hit markets.

Continuing the string of positive news, Samsung, a South Korean technology giant that you are likely familiar with, is building an Ethereum-based blockchain. The blockchain, which is still in an “internal experimental” stage, may host its own cryptocurrency, the fittingly named “Samsung Coin.” It isn’t clear what use this asset would hold, but the source suggests that blockchain could be brought to Samsung Pay, the tech giant’s fintech application. After this news propagated, Ledger was revealed to have received a $2.9 million cheque from the South Korean corporation.


Photo by ben o'bro on Unsplash

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Horizen (ZEN) Sees 15% Gain As Grayscale Invests $6.3 Million

Grayscale Unveils Horizen-Focused Fund With $6.3 Million Investment

Grayscale Investments, one of the foremost investment-focused firms in the cryptosphere, has just divulged that it will be creating a new fund that will solely be focused on the Horizen (ZEN) crypto asset, a lesser known altcoin that found its legs in late 2017.

For those who aren’t in the loop, Horizen is a privacy-centric cryptocurrency project that forked off ZCash’s blockchain in mid-2017. However, this wasn’t a plain old fork, as the team behind Horizen (formerly ZenCash) intended to develop on top of ZCash’s original code to appeal to a broader audience, while also offering anonymous transactions via zero-knowledge proofs (ZK-snarks).

Speaking with Fortune reporters, Rob Vigilone, the co-founder of the cryptocurrency project, revealed the vision for his brainchild. As ZEN’s privacy feature is now well-developed, developers intend to produce apps that leverage ZK-snarks and the Horizen blockchain to offer private messaging, media sharing, voting, and data storage to privacy-conscious individuals, corporations and groups.

Now back to the matter at hand…

Grayscale, who is the firm behind the Bitcoin Investment Trust vehicle, has just purchased $6.3 million worth of ZEN tokens (~400,000 ZEN as per September 5th prices) to establish the aforementioned fund, which will allow accredited investors or financial institutions to essentially purchase shares that ZEN’s every move. Grayscale’s ZEN fund now joins similar vehicles that have a focus on Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, XRP, and ZCash.

This move came as a surprise to many, as ZEN is a lesser-known project in this nascent industry, even though it holds a strong position as the 72nd largest cryptocurrency by market capitalization. So while its $83 million valuation is not a figure to scoff at, such an asset would often be off the radar of firms like Grayscale and Coinbase, for example.

However, Michael Sonnenshein, the managing director of Grayscale, spoke with Fortune to explain why his firm decided to make this unexpected move. As per statements from the executive, Grayscale’s top brass believe that Horizen is backed by “superior technology and a strong team” and may prove to be a valuable asset for blockchain-focused companies that intend to utilize the privacy features offered in Horizen’s ecosystem.

ZEN Sees 15% Surge In Otherwise Bearish Market

Once this news broke, ZEN immediately saw a surge in value, as many saw the substantial investment in the project as a bullish sign, to say the least. At the time of writing, ZEN is currently at $18.04 and is up a staggering 14.33% on the day,

Image Courtesy of CoinMarketCap

As a direct result of the news, ZEN quickly became the leading asset in the top 100 cryptocurrencies, as other crypto assets continued to struggle after Wednesday’s sell-off. It is unclear whether this positive price action will continue, but considering that an influential firm like Grayscale purchased a staggering ~7% of all ZEN tokens (and will likely not sell them) may signal that the price of this asset will continue to run in the mid-term.

Chart Courtesy of CoinMarketCap
Photo by Sean Stratton on Unsplash

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Grayscale Launches Investment Trust for Zen Cryptocurrency

Cryptocurrency asset manager Grayscale Investments has officially launched the ZEN Investment Trust for accredited investors, the company announced Thursday.

Centered around the privacy token zen, formerly known as zencash, the investment trust is a single-asset vehicle, meaning it only contains the one cryptocurrency. It is the latest single-asset investment trust launched by Grayscale, joining bitcoin, bitcoin cash, ethereum, ethereum classic, litecoin, XRP and zcash.

The trust is already open to institutional and accredited investors, according to a press release.

The trust “marks a significant milestone” for the Horizen platform, co-founder and president Rob Viglione said in a statement.

He added:

“Grayscale conducts unparalleled research and due diligence on their investment products, striving to offer regulated and professionally managed exposure to the digital currency market for institutional and accredited investors worldwide. Their values align seamlessly with Horizen’s mission to promote the growth of digital currencies, blockchain, and privacy to a diverse and global community.”

The news comes some months after Grayscale’s parent company, Digital Currency Group, announced it was also adding zen to its “conviction list” of cryptocurrencies.

DCG founder and CEO Barry Silbert said at the time that the asset manager was focusing on privacy coins as he believed “financial privacy is going to become a really, really important thing not just in emerging markets, but in the U.S. as well.”

Grayscale has raised roughly $250 million for its investment trusts in the first six months of 2018, Thursday’s press release noted.

While most of its products are limited to institutional or accredited investors, Grayscale’s bitcoin and ethereum classic investment trusts are open to individual investors as well, the release stated.

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Grayscale Adds Zcash Offshoot ZenCash to Crypto Investment List

Grayscale Investments has invested in ZenCash, a little-known, privacy-focused cryptocurrency.

Speaking at the Stocktoberfest East conference in New York City, Grayscale founder Barry Silbert – who also founded Grayscale’s parent company, Digital Currency Group – asked audience members to raise their hands if they owned offshore bank accounts.

“There is approximately 10 percent of the world’s wealth held in offshore bank accounts,” he said after some of the audience members raised their hands, adding:

“I believe that financial privacy is going to become a really, really important thing not just in emerging markets, but in the U.S. as well.”

For this reason, Silbert said, privacy coins were one of Grayscale’s primary focuses. That category includes zcash, a prominent privacy coin that Grayscale has previously revealed a stake in, as well the lesser-known ZenCash, which is a fork of a fork – via ZClassic – of zcash.

“I love the team,” Silbert said of ZenCash Wednesday, “I love the vision, and the community that we’ve gotten to know is incredibly passionate.”

He explained that the privacy coin is “broader” than its grandparent zcash, referring to its support for messaging and media applications.

Silbert said that ZenCash formed part of Grayscale’s “conviction list,” meaning that the firm has “meaningful dollars in a token.”

Despite his enthusiasm for certain digital assets, however, Silbert made it clear that the space as a whole is rife with soon-to-be flops.

“Most of the tokens are going to zero,” he said.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Digital Currency Group Adds Zcash Offshoot ZenCash to Crypto Investment List

Digital Currency Group has added ZenCash, a little-known, privacy-focused coin, to its “conviction list” of cryptocurrencies. The other coins on the list are bitcoin, ethereum classic, zcash and Decentraland.

Speaking at the Stocktoberfest East conference in New York City, Digital Currency Group founder and CEO Barry Silbert asked audience members to raise their hands if they owned offshore bank accounts.

“There is approximately 10 percent of the world’s wealth held in offshore bank accounts,” he said after some of the audience members raised their hands, adding:

“I believe that financial privacy is going to become a really, really important thing not just in emerging markets, but in the U.S. as well.”

For this reason, Silbert said, privacy coins were one of Digital Currency Group’s primary focuses. That category includes the relatively prominent zcash, of which the lesser-known ZenCash is a fork of a fork – via ZClassic.

“I love the team,” Silbert said of ZenCash Wednesday, “I love the vision, and the community that we’ve gotten to know is incredibly passionate.”

He explained that the privacy coin is “broader” than its grandparent zcash, referring to its support for messaging and media applications.

Silbert said that ZenCash formed part of Digital Currency Group’s “conviction list,” meaning that the firm has “meaningful dollars in a token.”

Despite his enthusiasm for certain digital assets, however, Silbert made it clear that the space as a whole is rife with soon-to-be flops.

“Most of the tokens are going to zero,” he said.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group.

Lotus image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Cash Demand Shocked Us, Says Circle Trading Chief

The pace at which bitcoin cash – the cryptocurrency that forked off the main bitcoin blockchain earlier this year – gained trading volume was “shocking,” according to Circle’s head of trading.

Speaking during a panel at CoinDesk’s Consensus: Invest event in New York, Circle’s Dan Matuszewski noted that the startup – which operates a trading desk and today unveiled a new investment-oriented app slated for release next year – was taken aback by the trading demand around bitcoin cash after it went live in early August.

“Bitcoin Cash got liquid and tradeable instantly, which was shocking to us. It was born out of nowhere … [and] became one of the biggest products we traded,” he said.

Matuszewski spoke alongside Adam White, head of Coinbase’s GDAX digital asset exchange; Michael Sonnenshein, GraySscale Investment director of sales and business development; and Hu Liang, founder of Omniex. The panel was moderated by Alex Sunnarborg, co-founder of Tetras Capital.

The panel – in part an introduction to the cryptocurrency industry for mainstream investors – focused on some of the challenges and considerations faced by those firms seeking to offer such services. Among those: assessing the legal standing of a particular token ahead of providing tools or resources around it.

On the question of demand among those investors, panelists spoke to what they characterized as a shifting landscape in which institutions are expressing interest – albeit cautiously.

“I think the narrative around this has really changed over the last 12 to 18 months,” Sonnenshein said. 

GDAX’s White notably offered insight into the make-up of its user base.

“Largely by user count, most customers tend to be retail,” he told attendees, noting that the trading volume itself is primarily driven by institutional-level customers.

According to Hu, the market remains a nascent one, and that the institutional investors in question are still largely on the sidelines.

“We haven’t reached escape velocity yet,” he said. 

Disclosure: Grayscale Investments is a subsidiary of Digital Currency Group, CoinDesk’s parent company. Digital Currency Group has an ownership stake in Circle and Coinbase. 

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.