Grayscale Says Pension, Endowments Funds Actively Getting Into Bitcoin

Jafrin  |  Jan 9, 2021

Grayscale’s newly appointed CEO Michael Sonnenshein has said that institutional investors are actively investing in cryptocurrencies. Notably, pension and endowment funds are largely eyeing towards the Grayscale family of funds. The fund manager is an attractive destination among institutional investors looking to seek exposure to Bitcoin. Earlier this week, Sonnenshein took over from Barry Silbert as its CEO being the firm's managing director for three years.

Pension, Endowments Funds Getting Into Bitcoin Through Grayscale

Grayscale has been at the center of the Bitcoin (BTC) buying spree among institutional investors with roughly holds 3% of BTC in circulation. In 2020, pension funds and endowment funds have allowed institutional buyers to enter the Bitcoin market.

CEO of Grayscale, Michael Sonnenshein, added on the increased institutional investments towards cryptocurrencies:

“We’ve started to see participation not just from the hedge fund segment, which we’ve long seen participation from, but now it’s recently from other institutions, pensions, and endowments. The sizes of allocations they are making are growing rapidly as well.”

Grayscale total assets under management, or AUM, have exceeded $27 billion across 10 different products. Its Grayscale Bitcoin Trust is the most popular product, with over $23 billion in AUM. Meanwhile, its Ethereum trust is currently valued at around $3.6 billion. 

Sonnenshein adds:

“This is a verifiable scarce asset and so when there are mechanisms that are removing them from circulation, that’s inherently making it an even scarcer asset.”

Institutional Investors Eyeing Cryptocurrencies

Fidelity Investments in a survey last year found that 36% of financial institutions across the United States and Europe said that they own cryptocurrencies or derivatives. Over one-quarter of the respondents reported holding Bitcoin, while 11% of the respondents owned Ether (ETH).

Grayscale’s increased interest investments towards its Bitcoin fund is largely due to the cryptocurrency’s increased price. The firm offers many cryptocurrency trusts that allow investors exposure to the asset class without needing to hold the underlying assets directly.

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