Grayscale Investments
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| Company type | Subsidiary |
|---|---|
| Industry | Finance |
| Founded | 2013 |
| Headquarters | , |
Key people | Michael Sonnenshein (CEO)[1] |
| Services | Asset management |
| AUM | US$50 billion (2021) |
| Parent | Digital Currency Group |
| Website | grayscale |
Grayscale Investments is an American digital currency asset management company and subsidiary of Digital Currency Group founded in 2013 and is based in New York City.[2]
History
Grayscale was founded in 2013, launching a bitcoin trust that year.[3] In 2015, the company became a subsidiary of Digital Currency Group.[4] The same year, Grayscale Bitcoin Trust (OTCQX: GBTC) began trading over-the-counter on the OTCQX market, becoming the first publicly traded bitcoin fund in the United States. The company charged higher than average fees compared to similar exchange-traded funds (ETFs), but said the fees were to cover the costs of trading bitcoin.[5][6] Grayscale sought to turn GBTC into an ETF in 2017, but voluntarily withdrew the application following negative remarks from the SEC.[7]
In 2017, Grayscale launched two additional cryptocurrency investment funds which held Ethereum Classic and Zcash. The following year, the company launched its fourth cryptocurrency fund, the Digital Large Cap Fund (GDLC), initially holding bitcoin, Ether, Litecoin, Ripple, and Bitcoin Cash.[8] GDLC began trading publicly in October 2019.[9] GBTC became an SEC-reporting bitcoin investment fund in 2020. As such, it files publicly available financial disclosure forms, including the quarterly Form 10-Q and annual Form 10-K.[10]
In 2021, the company added Grayscale Solana Trust to its portfolio, the 16th such fund it manages.[11]
In 2021, the company was said to manage more than $50 billion in assets.[12][13]
In 2022, Grayscale launched an ETF traded on American, British, Italian, and German exchanges that tracks the Bloomberg Grayscale Future of Finance Index, consisting of a blend of companies, including asset managers, exchanges, brokerages, and cryptocurrency miners.[12] In June 2022, the SEC denied Grayscale's request to turn GBTC into an exchange-traded fund, citing concerns about the lack of oversight over cryptocurrencies and the risk of price fixing.[14] The denial prompted Grayscale to sue the agency.[15]
As of November 2022, the Grayscale Bitcoin Trust holds one of the largest shares of bitcoin (BTC), with 643,572 BTC, worth about $10.6 billion, approximately 3% of all Bitcoin currently available.[16]
Contagion from FTX bankruptcy
When the Bahamas-based cryptocurrency exchange FTX filed for bankruptcy in November 2022, the Financial Times reported that investors in the trust “have suffered an 83 per cent loss since bitcoin peaked in November 2021.”[17] Grayscale Bitcoin Trust declined by 20% over the two weeks preceding 17 November.[18] It was trading at a discounted price, 42% below the value of its Bitcoin, as of 14 November.[19]
References
- ^ Rooney, Kate (January 14, 2021). "Crypto investment firm Grayscale sees 900% jump in assets to $20 billion amid bitcoin frenzy". CNBC. Retrieved June 22, 2022.
- ^ Rooney, Kate (November 1, 2018). "Crypto investment firm Grayscale rakes in $330 million this year despite bitcoin bear market". CNBC. Retrieved June 22, 2022.
- ^ Basar, Shanny (February 18, 2022). "Grayscale Investments Aims to Gain Share in US ETFs". Traders Magazine. Retrieved June 22, 2022.
- ^ Tepper, Fitz (October 27, 2015). "Barry Silbert Launches Digital Currency Group With Funding From MasterCard, Others". TechCrunch. Retrieved June 22, 2022.
- ^ Rosenfeld, Everett (April 1, 2015). "Public trading could begin next week for bitcoin fund". CNBC. Retrieved June 22, 2022.
- ^ Casey, Michael J. (March 1, 2015). "BIT Poised to Become Publicly Traded Bitcoin Fund". The Wall Street Journal. Retrieved June 22, 2022.
- ^ Son, Hugh (October 15, 2021). "Grayscale Investments close to filing application for spot bitcoin ETF, source says". CNBC. Retrieved July 14, 2022.
- ^ Roberts, Daniel (February 7, 2018). "Exclusive: Grayscale launches new 'Digital Large Cap Fund' tied to 5 top cryptocurrencies". Yahoo! Finance. Retrieved June 22, 2022.
- ^ Schlegel, Jeff (October 15, 2019). "Finra OKs OTC Listing Of Digital Currencies Fund". Financial Advisor. Retrieved June 22, 2022.
- ^ del Castillo, Michael (August 6, 2020). "20 Institutional Bitcoin Investors Revealed, But Soon The List May Vanish". Forbes. Retrieved June 22, 2022.
- ^ Ehrlich, Steven (November 30, 2021). "Grayscale Investments Launches Trust With Exposure To Ethereum Competitor Solana". Forbes. Retrieved June 22, 2022.
- ^ a b Howcroft, Elizabeth (May 16, 2022). "Grayscale to launch digital assets ETF in UK, Italy, Germany". Reuters. Retrieved June 22, 2022.
- ^ Rooney, Kate (November 1, 2021). "Grayscale-parent Digital Currency Group tops $10 billion valuation with SoftBank, Alphabet investments". CNBC. Retrieved June 22, 2022.
- ^ Sutton, Sam; O'donnell, Katy; Weaver, Aubree Eliza (July 1, 2022). "No holiday break for crypto". Politico. Retrieved July 8, 2022.
- ^ Harty, Declan (June 30, 2022). "Grayscale escalates spot Bitcoin ETF debate with lawsuit against SEC". Fortune. Retrieved July 8, 2022.
- ^ https://uk.finance.yahoo.com/news/bitcoin-teeters-grayscale-owner-dcb-reveals-debt-145958704.html
- ^ "World's largest crypto fund swept into FTX storm". Financial Times. 2022-11-18. Retrieved 2022-11-22.
- ^ Ross Sorkin, Andrew; Mattu, Ravi; Warner, Bernhard; Kessler, Sarah; Gandel, Stephen; J. de la Merced, Michael; Hirsch, Lauren; Livni, Ephrat (17 November 2022). "Investor Losses from FTX's Implosion Are Growing". The New York Times. Retrieved 17 November 2022.
- ^ Greifeld, Katherine (14 November 2022). "World's Biggest Crypto Fund Hits Record 42% Discount to Value of Bitcoin It Holds". Bloomberg. Retrieved 17 November 2022.