Given the rate at which Grayscale is buying Bitcoin in general, it seemed like the cryptocurrency fund management company was trying to buy all of the existing Bitcoin. However, this pattern stopped more than three weeks ago and has not been resumed since.
The Grayscale Bitcoin Trust Fund (GBTC) typically files a Form 8-K weekly with the Securities and Exchange Commission (SEC) and explains recent Bitcoin acquisitions. The last time this report was released was June 25th, when the company announced the purchase of nearly 20,000 BTC. According to their report for the second quarter GBTC raised an average of $ 57.8 million per week in investments.
A grayscale spokesman told Cointelegraph: that the interruption of BTC purchases is temporary and is due to a period of administrative silence:
“There was a period of silence from the administration for the private placement of the Grayscale Bitcoin Trust. The trust can be subscribed to from Friday, July 10, at 4:00 p.m. (CET). “
Definitely, Grayscale has since released no information on the SEC about new Bitcoin acquisitions.
Grayscale indicates an institutional interest in Bitcoin
It is important to note that GBTC is not a hedge fund that buys assets with the expectation of making a profit from them later. Instead, he buys Bitcoin every time investors buy his stocks. Each share currently corresponds to 0.00095891 BTC.
In the second quarter 84% of Grayscale’s investments came from institutional investors, mainly hedge funds. So, This reversal indicates the institutional interest in the asset. The company itself boasted of its capabilities and bought more bitcoin than it mined:
“After halving Bitcoin in May, GBTC inflows in the second quarter exceeded the number of newly mined Bitcoin in the same period. With such an influx of grayscale levels compared to newly mined Bitcoin, Bitcoin pressure has decreased significantly, which is a positive Can be a sign of the appreciation of the Bitcoin price. “
Why did institutional investors stop buying?
There are at least a few possible explanations for this sudden withdrawal. One thing is seasonal: July is usually a slow time to invest. Many asset managers travel or vacation. Another reason could be that Bitcoin has not been very active in the past few months.
Bitcoin weekly price chart (on Coinbase). Source: trade view
While recovering rapidly after Black Thursday, it attracted much more attention from investors affected in traditional markets and worried about the uncertainty of unprecedented stimulus packages. However, since the beginning of May, Bitcoin has stagnated in an “undecided” mode. There are many less mysterious assets that can do the same.