Leading digital asset investment firm Grayscale Investments is a gauge of institutional demand for cryptocurrencies, especially bitcoin. The Grayscale Bitcoin Trust boasts $39.7 billion in assets under management (AUM). Now the parent firm has received a ringing endorsement from some high-profile names in Silicon Valley.
In a rare funding round, Digital Currency Group, Grayscale’s parent company, has attracted some major investors, including a division of tech giant Google, that are betting on the further adoption of bitcoin and other major cryptocurrencies. SoftBank led a $700 million secondary round into DCG with participation from CapitalG, which is the growth fund of Google parent company Alphabet, as well as Ribbit Capital and others. For its part, Google’s Capital G has $3 billion in AUM.
The massive round values DCG at $10 billion and represents one of the few times that Grayscale’s parent company has raised outside capital. Prior to this round, DCG had raised a total of $25 million in funding.
The firm doesn’t appear to have its sights set on going public, according to DCG CEO Barry Silbert cited by CNBC. DCG is on track to generate more than $1 billion in revenue in 2021.
Bitcoin Bet
The participation of Google’s CapitalG, among other backers, comes in the midst of bitcoin’s bull cycle in which the flagship cryptocurrency has recently attained a fresh all-time high. Market leaders are convinced that bitcoin has more runway for gains before the year is over.
Bitcoin’s dominance currently hovers at 44% while Ethereum’s is just over 19%. While meme coins in particular have been trading more independently from bitcoin of late, institutions are generally drawn to bitcoin first given its track record and acceptable regulatory status, as evidenced by the recent approval of a BTC futures ETF.
Grayscale Pursues Bitcoin ETF
Now that regulators have allowed a bitcoin futures ETF to trade, Grayscale has its sights set on converting its bitcoin trust to a spot-market ETF. According to Grayscale’s global head of ETFs, David LaValle, cited by Bloomberg, the firm is confident that the SEC will green-light its bitcoin ETF application by July 2022.
Since the ProShares Bitcoin Strategy ETF (BITO) launched in October, the bitcoin price set a fresh all-time high of close to $67,000. It has since pulled back from that level but remains above the psychologically sensitive $60,000 threshold.
Bitcoin Fear and Greed Index is 74. Greed
Current price: $61,950 pic.twitter.com/Qbr9mQBeoS— Bitcoin Fear and Greed Index (@BitcoinFear) November 1, 2021
The bitcoin Fear & Greed Index is flashing “greed” with a reading of 74 as investors expect wide-scale adoption to boost prices further.
