If you have been watching crypto market news during the last few months, there is one companies' name that keeps popping up and that is Grayscale. Over the last few months they have been purchasing bitcoin at an unprecedented pace and if they continue to do so, by January of next year it is predicted that they will own 3.4% of all bitcoin. That is a very large amount that will have just as large implications for the bitcoin market. But there are some important things that you need to know first so let's dig into this more.
First of all, what is Grayscale and why are they buying bitcoin?
Well their official name is Grayscale Investments and Grayscale's slogan goes as follow; "A trusted authority on digital currency investing, Grayscale provides secure access and diversified exposure to the digital currency asset class." Basically what this means is that it is an investment fund group that focuses on digital investments, such as cryptocurrency. Customers will purchase bitcoin and other cryptos through Grayscale, and pay yearly fees for Grayscale to hold/secure them. While they do charge an insane up charge at the moment for this service, there are some actual great benefits. For a lot of the older generation, buying bitcoin and even more, securing them can be quite a difficult thing to do. This simplifies that process for them. The other great benefit is after a period of time these investments can be withdrawn tax free. Anyone who has sold substantial bitcoin, especially in the USA, knows how expensive these taxes can be.
Grayscale is buying.....a lot!
I did mention that Grayscale have been purchasing bitcoin at an unprecedented level. Kevin Rook, a crypto analyst had this to say on Twitter about Grayscale.
As he mentioned, since the bitcoin halving there have been 39,544 BTC mined, and during that same timeframe, Grayscale alone has bought 53,588 BTC. If you look even closer at the tweet, you can see that they seem to be accelerating their purchasing as well, perhaps they know something that we don't and a bull run will soon be upon us. Either way, just this one company alone has purchased more bitcoin than has been mined after the bitcoin halving.
Let me say that again again, just this one company did this. Now then think about all the other companies, executives, the rich, and other people that are all continuing to purchase bitcoin as well. The available supply of bitcoin to purchase will quickly begin to dwindle, and the price of bitcoin will soon begin to reflect on that as well.
This does have large implications for the industry as a whole. While I think most crypto people are not excited about "Wall Street" type companies to have so much power and control in the crypto industry. It really was unavoidable in my opinion. In any market that there will be ways to invest to make money, the people from Wall Street will always want to join in and have a slice of that pie, so to speak.
While it is important to note that while Grayscale did buy all of this bitcoin and are holding it. They aren't actually the one's that own it. People are joining Grayscale, and giving them money to go out and purchase/secure the coins. Grayscale actually makes their money from the insane up charge that they give back to the customers and yearly fees.
With this news, and all the other crypto news out it really seems we are heading fast towards a new bull run. You have the Grayscale news, the recent extreme popularity of DeFi, the upcoming Cardano Shelley update, Ethereum 2.0 releasing in the near future, and then of course there was just the recent bitcoin halving.
Once thing is for certain, and that is the fact that this is a very exciting time to be in the cryptocurrency market. I'm doing my very best to accumulate as much as I can before things really blast off.
I would love to hear what you think of Grayscale, and what things have you really bullish for the bitcoin/crypto industry at the moment?
Thanks for reading!