Bitoffer Institute: Grayscale Invested 2/3 of New Bitcoins, Bitcoin ETF Ready to Surge
Lots of stories shown up in the market of which Grayscale Fund has bought bitcoin aggressively recently, which triggering the current round of bitcoin rising from $3800 to the $10,000 barrier, therefore, divergent opinions about this messages are shown up in the market.
Firstly, the key point we should notice is that the Grayscale Fund does indeed buy Bitcoins. Official data shows that within one month as of mid-May, the Grayscale Fund collected 37,000 bitcoins from the market, occupying more than 70% of the entire net mining output and which is equivalent that most of the new Bitcoin’s supply in the market has been swallowed. In theory, the market will indeed form a certain short-term rise effect.
Secondly, the global economic recession which affected by the COVID-19 lead to the collapse of the currency price. Usually, the negative factors brought about by external will only cause a temporary decline. This is the market inertia so the rise in currency prices also has a factor of oversold rebound.
Finally the most significant factor is that Bitcoin ushered the third halving of block rewards, the output of Bitcoin is declining however the quantity of Bitcoin itself is fixed. After the production is reduced, Bitcoin has become scarcer and the limited supply accompanied by the infinite demand, which will inevitably cause long-term bullish prices.n Therefore, intrinsic bull news is the most critical factor driving the increase of Bitcoin price. Under the influence of multiple factors such as Bitcoin halving, oversold rebound and snapped up by the funds constitute the real reason for this rise, not just the single factor of market capital buying.
So what is Grayscale?
Grayscale is a trusted authority on digital currency investing which established in 2013 by Digital Currency Group(DCG). Grayscale Investments is the sponsor of Grayscale Bitcoin Trust (BTC), Grayscale Bitcoin Cash Trust (BCH), Grayscale Ethereum Trust (ETH), Grayscale Ethereum Classic Trust (ETC), etc..As an American crypto asset management company and a global giant crypto asset fund, currently has a Bitcoin trust asset of 3.29 billion US dollars, which is roughly equivalent to 353621 bitcoins at the current price.
In mid-April, the total value of the Bitcoin trust assets controlled by the Grayscale Fund was only 2.09 billion US dollars, which was equivalent to 315,779 bitcoins. This means that the Grayscale Fund bought 37,824 bitcoins within a month, which nearly average 1,261 per day. On the eve of bitcoin halving, the daily market output was around 1,800 bitcoins. From the data, grayscale is indeed a large-scale acquisition of bitcoin on the market which is very strong, consequently, this action triggering market speculation about this acquisition
Comparing with those foreign institutional funds which entering the market with a large amount of bitcoin purchasing, what are the market funds doing? Lucian, the chief analyst of BitOffer, revealed to us: Generally speaking, when users enter the market to buy Bitcoins, the USDT price will rise sharply, because the increase in demand will directly trigger the price increase, which will generate positive feedback. In the round of BTC increase, the USDT price has dropped sharply, which reflects that users are shipping heavily. Compared with foreign data, foreign institutional funds are taking over.
Lucian also concluded that from this phenomenon, the market capital movements are relatively one-sided. According to BitOffer's official data, since the plunge occurred on March 12th, the bitcoin ETF fund which Bitoffer launched has been purchased more than US $ 500 million in the past two months, and the ETF market share is only second to the Grayscale digital asset management company. In addition, the Ethereum ETF fund has also shown a substantial growth trend which indicates that global institutional funds are entering the market to buy digital ETF funds.
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