The Grayscale crypto fund has now crossed $60 billion and with it, it has overtake the largest gold fund in the world. Its total Assets Under Management (AUM) are at record highs after the crypto sector especially Bitcoin soared high again. Grayscale Bitcoin (GBTC) fund is alone worth $41.75 billion on its own, a new record for it as well as institutional investment intensifies.
Grayscale’s assets under management has topped $60 billion https://t.co/HvMnrpAFgd
— Barry Silbert (@BarrySilbert) November 10, 2021
Grayscale’s latest uptick in total assets has brought it into the heavyweight division, challenging one of the oldest and most valuable bullion funds out there. The SPDR Gold (GLD) Shares is one of the oldest institutional manager and investor of Gold in the world. For a few years, it was the second largest ETF anywhere in the world and even topped out at the #1 position. So, even though Grayscale is not exactly an ETF, it has managed to beat it. This shows the explosive power of the crypto sector and its ability to disrupt entire investment classes even with the regulatory restraints put on it. The GLD shares are the natural safe haven for investors around the world and they come into play when investors are unsure about the markets and want to fall back onto a safe haven.
Grayscale has in many ways covered the gaping hole in the US investment scene when it comes to asset managed cryptocurrencies. Exchange Traded Funds (ETFs) still haven’t been allowed in the country and most look to funds like GBTC and their arrangement.
However, the GBTC may face an issue in the near future if ETFs are allowed by the Securities and Exchange Commission (SEC) of the country. Its own top executive has said that if such a scenario arises, Grayscale itself will be reorganized as an ETF of its own. This means that the current strategy from the company with over $60 billion in AUM is based on the no-ETF approach from the US government. But still, disregarding the pending SEC decision, Grayscale has done a remarkable job and that shows on paper.
The GBTC fund rose to prominence late in 2020 when bulls rose to the challenge and fought off an incoming wave after after wave of big sell offs. Grayscale absorbed most of these selloffs and those early investors are raking in the profits now. Overall, because of the price drop earlier today, Grayscale is now worth less than GLD shares at the end of the day as the latter is still trading at $58k and the former lost around 7% today based on the price drop.
Image Source: pixabay.com
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