Grayscale’s crypto assets drop by $3.7 billion in single day as Bitcoin falls

abdelaziz Fathi

Grayscale Investments, a subsidiary of Barry Silbert’s Digital Currency Group, announced Tuesday that the firm’s total assets under management were $55.1 billion. That is $5 billion less than a week before when the New York-based crypto-fund manager held a staggering $60.8 billion in cryptocurrencies for the first time.

According to a recent Grayscale tweet, the amount of crypto assets under its management totaled $58.8 billion on Monday.

The 9% fall in Barry Silbert-affiliated crypto hedge fund’s holdings comes as Bitcoin dropped back below $60,000, a pronounced drop from the high it set earlier this month when it went over $68,000.

While nothing is certain about the recent fall in BTC prices, but it seems President Joe Biden’s new legislation could impact the tax ramifications for crypto investors.

Grayscale’s assets valuation is mostly dominated by its flagship product, Grayscale Bitcoin Trust (GBTC), which ballooned to $43 billion on November 11. The Bitcoin product now counts less than $40 billion, a massive drop caused by Bitcoin’s major correction.

At the time of writing, Bitcoin trades at $59,636 on Coinmarketcap. Additionally, the market capitalization of BTC has dropped from $1.27 trillion on November 8 to $1.13 billion at the time of this report. By comparison, Grayscale’s stock price was trading at $47.07 on Tuesday, down 8 percent today. This means the fund’s public shares had fallen more than bitcoin itself over the day.

Yet the company seems unconcerned about the recent drop. Its executives argued previously that they see any price fall a good buying opportunity and predict that the price will continue to pull higher.

Investments into the company’s Ethereum Trust hit a record $14.8 billion in total investments last week. But the ether product saw outflows of more than $1.3 billion since then.

Grayscale maintains positions in nearly 15 crypto assets. The company’s publicly-traded funds offer institutional investors the opportunity to trade crypto on the stock market, with most of the funds poured into the Grayscale Bitcoin Trust. Besides institutional investors, which accounted for 90 percent of the total investment in the third quarter, Grayscale said accredited individuals, retirement accounts and family offices increased their involvement.

The firm has filed to convert the world’s biggest Bitcoin fund into an ETF, although the Securities and Exchange Commission (SEC) has yet to greenlight any spot bitcoin exchange-traded fund to date.

Read this next

Digital Assets

FTX Japan has until March to return customer assets

The Kanto finance bureau of Japan’s Ministry of Finance (MoF) said it will extend its business suspension order for FTX Japan, the Japanese arm of the beleaguered crypto exchange

Executive Moves

Johan Wiese replaces Richard as director of IG South Africa

IG Group, Europe’s largest online trading platform, has relocated its Finance Chief Operating Officer (COO) Johan Wiese to join its South Africa business as a director.

Digital Assets

Nexo continues European expansion with Polish licence

Crypto lender Nexo said today that it had been registered as a virtual currency operator with the Ministry of Finance in Poland, which enables its European-based entity to provide services to the country’s residents lawfully.

Digital Assets

Wirex expands crypto lineup to 130 tokens

Payment and crypto wallet provider Wirex has listed 52 new tokens on their app, bringing the total number of supported digital assets to 130, alongside 13 fiat currencies.

Executive Moves lures IG’s long-serving exec Greg Adams

Multi-licensed online brokerage group has appointed Greg Adams, who spent the bulk of his two-decade career at IG Group, as its newest head of risk.

Digital Assets

Farcana and Dravus join forces to line up sustainable mining power sources

As a result of growing ecological awareness, the sector’s top companies have been working to achieve effective cryptocurrency mining while still being energy-efficient: e.g. using mining facilities fueled by renewable power and located in colder regions to lower heat-dissipation costs.

Retail FX

Vantage to expand swap-free trading offering after savings of $1 million in gold XAUUSD

The swap-free product enhancement was designed to provide greater convenience for gold XAUUSD traders. Clients are not charged overnight fees when trading across all trading accounts, including on the Vantage App, regardless of trade size.

Digital Assets

Bosonic launches Cross Custodian Net Settlement to further eliminate settlement risk

Bosonic has announced the go-live of Cross Custodian Net Settlement (CCNS) in which trades in USDC and ETH were executed, cleared, and settled atomically between two digital asset custodians, First Digital in Hong Kong and Propine in Singapore.

Industry News

IntraFi taps Broadridge to offer loans to costumers of brokers, advisors, and RIAs

“Broadridge’s partnership with IntraFi expands the availability of securities-based lending to previously underserved parts of the market — community and regional banks, independent broker-dealers, and unaffiliated advisors and RIAs.”