Odaily Frontline | Grayscale has quietly accumulated 2% of ETH in circulation, worth over $800 million

This article comes fromCryptoSlate, original author: Nick Chong

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Ethereum is one of the best-performing crypto assets this year, with its price down more than 90% from its all-time high after a brutal bear market in 2018 and 2019.

A key catalyst behind Ethereum’s recovery has been institutional purchases of large amounts of ETH, which is when the decentralized finance (DeFi) space is starting to gain significant traction.

Graysca le Investments now holds 2% of BTC and 2% of ETHData DisplayAccording to Digital Currency Group (DCG) CEO Barry Silbert, Grayscale Investments' Ethereum Trust has quietly amassed 2% of all ETH in circulation as of recently. Grayscale (Grayscale), a digital asset management company under DCG, manages approximately $6 billion in funds for institutional clients such as hedge funds and family offices.

, 2% of ETH in circulation is about 2.25 million pieces, currently worth more than $800 million.

Its most popular product, Grayscale Bitcoin Trust, saw inflows of $719.3 million in the third quarter, while total Bitcoin assets under management (AUM) rose 147% in 2020. Crypto products other than Bitcoin Trust accounted for 31% of the total investment of $1 billion. Grayscale’s LTC and BCH trust funds and the “Large Cap Fund” both saw quarterly inflows up 1,400%.

The firm said 81% of investments in the third quarter came from institutional investors and 57% came from investors investing in multiple products. This reflects broadening investor interest in crypto assets other than bitcoin.

On October 14, Grayscale Investments reported its best quarterly results to date. In its third-quarter 2020 financial report, Grayscale said it had inflows of $1.05 billion across all products. So far this year, the figure stands at $2.4 billion, which is more than double the total raised between 2013-2019.

Its most popular product, Grayscale Bitcoin Trust, saw inflows of $719.3 million in the third quarter, while total Bitcoin assets under management (AUM) rose 147% in 2020. Crypto products other than Bitcoin Trust accounted for 31% of the total investment of $1 billion. Grayscale’s LTC and BCH trust funds and the “Large Cap Fund” both saw quarterly inflows up 1,400%.The firm said 81% of investments in the third quarter came from institutional investors and 57% came from investors investing in multiple products. This reflects broadening investor interest in crypto assets other than bitcoin.Grayscale isn’t the only institution gaining exposure to Ethereum.

As CryptoSlate

As mentioned earlier, Spencer Noon, head of encryption investment at DTC Capital, said that institutional interest in DeFi is mainly reflected in ETH investment, rather than the actual "yield farming (yield farming)" business or DeFi tokens themselves:

“After talking to institutional investors, fund managers, OTC desks, and family offices over the past few weeks, my take on DeFi is: the herd is coming. They’re excited about DeFi but new to it, so They buy ETH first."

However, Noon does believe that investors who hold exposure to Ethereum but are interested in DeFi will eventually “raise the risk spectrum” to the DeFi token space once they become more familiar with industry concepts and protocols.

Spencer Noon secondary titleA bright future for Ethereum

A massive ETH accumulation due to fundamental trends suggests a bright future for the cryptocurrency.

Recently shared three key factors

, showing that Ethereum is stronger than ever both on-chain and fundamentally. In particular, he pointed out the fees charged by miners, the number of Ethereum contract requests, and the number of daily active addresses:

"L1 is very healthy - long-term fundamental indicators show that Ethereum has never been so healthy. 1. The daily transaction fee of the ETH network has surpassed BTC; 2. The number of contract requests in September is 115 million, up from 5700 on June 3 3. Daily active addresses continue to exceed 400,000."

Odaily Note: According to news from October 9, Messari data shows that the transaction fee of Ethereum has exceeded the transaction fee of the Bitcoin network for two consecutive months, which is the longest period in which the transaction fee of Ethereum exceeds that of Bitcoin. In August, with decentralized finance (DeFi) running at high speed, Ethereum fees soared to record highs. Smart contracts supporting DeFi protocols often need to execute multiple Ethereum transactions, exacerbating network congestion. The average Ethereum fee is currently about $2, down from an all-time high of more than $14 in September.