Grayscale released its 2018 annual report which shows an increase of 400% in the “total investment sum” bracket, compared to the previous year. Interestingly, around two-thirds of the entire investment ($359.5 million) come from institutional investors.
“It was by no means our best quarter, but it’s certainly important to recognize that despite the price declines investors were actively engaged,” said Michael Sonnenshein, the Grayscale managing director.
The report emphasizes two takeaways related to the involvement of institutional investors.
“First, the average investor at this stage of the bear market is patient with a multi-year investment horizon (i.e., investing for retirement). Second, institutional investors are building core strategic positions in digital assets over time and have largely viewed the 2018 drawdown as an attractive entry point.”
As expected, the majority of investment went into the “Grayscale Bitcoin Trust” – $242 million.
Grayscale Investments is a subsidiary of the Digital Currency Group, a venture capital company based in New York. Digital Currency Group also owns and operates Genesis Trading, a digital currency trading for high net worth individuals.
Grayscale is considered to be the largest digital currency asset management firm.
For their founder and CEO, Barry Silbert, the story hasn’t changed much. Silbert is widely regarded as one of the most influential cryptocurrency experts.
Back in November last year, Silbert was one of the first industry experts to say the “ICO market is dead”.
“The ICO market is dead — over. You now have a lack of demand from ICOs. And you have all the sponsors of the ICOs who raised a bunch of bitcoin and Ethereum that are now starting to sell that,” Silbert told CNBC in November last year.
At that time, Silbert also spoke about the involvement of institutional investors in 2019.
“What’s happening without much publicity is companies are being built to create an infrastructure to enable the on-boarding of a whole new category of investors, which I think is going to happen in 2019,” he said. “That’s the institutional investors. So behind the scenes, nobody has slowed down. There are certainly institutional investors that have put money to work and many more are considering it. Until now they wanted to make sure they’re not catching a falling knife,” added Silbert.
Today, Silbert is not as bullish on the entire crypto industry.
“I’m not a believer in the vast majority of digital tokens and believe most will go to zero,” Silbert told CNBC.
His rationale for such statement is, of course, connected to the phenomenon of ICOs.
“Almost every ICO was just an attempt to raise money but there was no use for the underlying token. The vast majority of what’s out there will be eliminated,” he adds.
Silbert goes even further by saying that most of the tokens were illegal offerings. This statement is in line with the official position of the US Securities and Exchange Commission (SEC).
Still, not all digital coins are doom and gloom for Silbert. He continues by saying he is “as bullish as he has ever been” on bitcoin, although he admits Bitcoin has “a really ugly technical chart”.
As always, Silbert finished his interview on a high.
“As far as I’m concerned bitcoin has won the race to be digital gold”.