Institutional investment in Bitcoin still booming despite value dip

Crypto hedge fund investment has not dropped despite the fall in the value of coins such as Bitcoin, Grayscale has suggested.

The firm has seen huge success this year, bringing in $81.1 million in Q3 after seeing a 33 percent boost in the previous quarter, reports CNBC. Grayscale’s inflow thus comes to $330 million for the year.

Michael Sonnenshein, managing director of Grayscale Investment, told CNBC: “Bitcoin prices doing nothing but go down the entire year has not deterred our existing clients from putting more capital to work. Asset inflows are really strong despite these price declines.

“Investors are taking the pullback as an opportunity to increase their exposure. The price has not slowed down the pace of investments – it’s actually caused us to broaden our relationships.”

Sonnenshein says that 70 percent of the income comes from institutional investors such as hedge funds, rather than traditional retail buyers who receive most of the press.

In Q3, 73 percent of Grayscale’s inflow was to the Bitcoin Investment Trust, despite the 55 percent fall in Bitcoin’s value since its peak. And a pleasant side effect of the attention crypto has received is that fewer people need to basics explained to them.

Back in February, we reported a 100 percent rise in cryptocurrency hedge funds over four months, which increased assets to $5 billion.

While the crypto space has significantly changed since the start of the year, at the time, a partner from fintech research house Autonomous NEXT, said: “While the softer prices of crypto assets does create a more difficult environment for investors, I do not think it will pause the influx of funds and other financial institutions building products in the space.”