GBTC (Grayscale’s Bitcoin Investment Trust), which is supposedly the only Bitcoin investment trust in the United States, saw its worth drop to less than $1 billion for the first time in 2018.
Grayscale’s Bitcoin Investment Trust allows investors to trade in Bitcoin via traditional investment vehicles, thereby protecting them from the challenges of buying, storing as well as securing Bitcoins.
Record Number of Bitcoin Deposits
Despite the fact that the worth of the Trust has dropped below the $1 billion mark for the first time this year, GBTC is also seeing a record number of Bitcoin deposits. According to a report published by the entity, GBTC is now holding a record breaking 203,000 Bitcoin in its coffers. This number, however, is still just a little over 1% of the total Bitcoin supply in circulation.
GBTC’s report stated that these record inflows have led to record Bitcoin holdings that are equal to last December. In fact, these inflows have gone up a little versus the beginning of the last month.
Other Crypto-Based Products Not Gaining Traction
Despite the record number of deposits in Bitcoin, GBTC also reported that their other cryptocurrency-based financial products had not gained the same traction. The assets under management of GBTC’s eight other non-Bitcoin related products were at a mere 56.4 million, which is just a little over 6% higher than the sponsor’s total.
GBTC’s report stated that this number of non-Bitcoin related products had, in fact, dropped by 8% from the time that the Trust had launched its Zen Fund.
The Trust’s share prices have been on a steady decline since the massive Bitcoin surge that took place in December of 2017. Between the December 2017 high and October 2018, Grayscale’s share prices have plunged a massive 80%.
This is because the value of GBTC’s fund is directly proportional to the value of Bitcoin, thus, since Bitcoin’s value has plunged 80% in the last one year, so has Grayscale’s.
Despite these figures, Grayscale has been a preferred form of cryptocurrency investment by institutional investors, and has seen a capital inflow of about 56% in 2018.
In July this year, the Trust Fund released a report that detailed the investments being made. According to this report, institutional investors had put in an average of $848,000, family offices had invested about $553,000, retirement accounts had invested $335,000 and individuals had invested $289,000.
The fund also reported that while the bear sentiment in the cryptocurrency market had discourage speculators from investing, the rate of investment in their products has gone up to levels that the Trust had not seen previously.