Grayscale’s Q1 report highlights a record $500 million inflow to crypto investment products

In their Q1 2020 report, Grayscale, one of the largest crypto asset managers raised over $500 million nearly doubling their previous quarterly high. Around one-third of that was from new investors who decided to enter the market amidst the heightened volatility this quarter. The vast majority of inflows were also from institutional investors who comprised 88% of inflows. Investors also are diversifying their holdings more with 38% of them allocating to multiple Grayscale products compared to 29% in Q1 2019.

Why it matters

• Historically, large inflows relative to Grayscale’s total AUM have preceded market rallies. With the halving upcoming and loose monetary policy around the globe, there appears to be a confluence of events investors are watching that could serve as bullish indicators for bitcoin.
  
• The increased participation from institutional investors signals that bitcoin is increasingly being seen as having a role in a diversified portfolio in this uncertain macro environment. While it sold off worse than the rest of the market in March and correlation increased with equities, it can still serve as an inflationary resistant asset that can perform well against a backdrop of irresponsible monetary policy.