Grayscale Investments reported a record-breaking third quarter in 2020, bringing in $1.05 billion in inflows across its crypto investment products. The result marked the firm’s largest quarterly haul on record and its third consecutive quarter of new highs. Year to date, total investment into Grayscale’s product family has exceeded $2.4 billion.
Institutional Capital Led the Quarter
According to the company, 81% of third-quarter inflows came from institutional investors, with hedge funds making up the dominant share. Offshore investors also played a major role, accounting for 57% of new investment capital during the period. Over the 12 months ending Sept. 30, Grayscale’s products attracted $2.7 billion, more than double the $1.2 billion in cumulative inflows recorded from 2013 through 2019.
The figures suggest that regulated digital-asset products are gaining stronger traction among professional investors, especially as institutions increasingly seek crypto exposure through familiar fund structures.
Unprecedented Demand for BCH, LTC and DLC
Beyond the headline inflow number, Grayscale said three products saw “unprecedented demand”: Bitcoin Cash (BCH), Litecoin (LTC), and the Digital Large Cap (DLC) product. The firm said each posted more than 10x quarter-over-quarter growth in inflows, with the average increase across the three products topping 1,400%.
Grayscale linked that surge in part to FINRA’s July verification that the required diligence had been completed to begin quoting its bitcoin cash and litecoin products. That regulatory milestone appears to have helped unlock stronger investor interest.
Assets Under Management Reach $6.3 Billion
As of Tuesday, Grayscale’s total assets under management stood at $6.3 billion. The Grayscale Bitcoin Trust (GBTC) remained the largest product with $5.157 billion in assets, followed by the Ethereum Trust at $867.7 million and the Digital Large Cap Fund at $92.0 million.
Grayscale said investors appear to be turning to digital assets in part because the asset class has outperformed major indices on a year-to-date basis. The firm also announced that its Ethereum Trust, like GBTC, had become an SEC reporting company, a status that may further improve transparency and investor confidence.