In the first quarter of 2020 alone, the fund recorded an inflow of USD 503 million. BlackRock investors withdrew USD 31 billion from the company’s funds.
The interest from institutional investors in Bitcoin is on the rise with Grayscale, the largest mutual fund in this cryptocurrency, posting a record-high revenue flow in the first quarter of the year.
New York-based Grayscale allows its investors to buy Bitcoin and other major cryptocurrencies through its fund. In the past 12 months, the firm saw an investment of around USD 1 billion. There was an inflow of a little over half a billion US dollars (USD 503 million) in the first quarter of this year.
There is a massive interest in Grayscale’s Bitcoin fund, the largest and flagship fund of Grayscale. This takes place when BlackRock, the world’s largest asset manager, reveals that in the last quarter panic-stricken investors fled their long-term investment funds for the first time in five years.
Grayscale said that there was an investment of USD 389 million in its Bitcoin fund in the first quarter of 2020. This has been the best quarter in its history, with an increase of almost USD 200 million in the last three months of 2019.
Grayscale’s latest quarterly increase of more than USD 500 million is almost twice as much as its previous quarterly record high of USD 254 million. It reached that level in the third quarter of last year, with new investors representing USD 160 million of the money raised.
At the same time, Grayscale’s Ethereum fund also recorded quarterly inflows of USD 110 million.
Last January, Grayscale CEO Michael Sonnenshein stated that institutional money had already arrived in Bitcoin and the cryptocurrency market.
Elsewhere, traditional asset managers have suffered losses throughout the historic first quarter of 2020. Institutional investors withdrew around USD 31 billion from BlackRock mutual funds and exchange funds during the first three months of the year. The 2020 bullish market turned 180 degrees towards complete financial collapse due to the coronavirus crisis.
Kyle Sanders, an analyst at Edward Jones, said that even BlackRock is not immune to a market crash in a note to his customers, following BlackRock’s latest statements.
There is a collapse in the markets and economies worldwide as the confinement to stop the spread of the coronavirus (COVID-19) sweeps the S&P 500 Index, which lost a staggering 20% between January 1st and March 31st.
However, Bitcoin has performed better than most markets, since its price is more or less the same as in early January.
Before the market chaos that the coronavirus pandemic caused, many Bitcoin heavyweights and the community of cryptocurrencies, in general, were optimistic about the prospects for Bitcoin this year, since the upcoming Bitcoin halving is a potential positive catalyst.
The Bitcoin halving occurs to reduce the reward for miners by half, so it will go from 12.5 BTC to 6.25 BTC per block around May 13th.
There have already been two Bitcoin halvings since the cryptocurrency was born in 2009, one in 2012 and the other in 2016. Bitcoin halvings are scheduled to occur approximately once every four years until the network has generated a complete supply of 21 million BTC, which might happen well into the next century.
By Alexander Salazar