![Grayscale Investments Launches Defi Fund — Now Offers 15 Crypto Investment Products Grayscale Investments Launches Defi Fund — Now Offers 15 Crypto Investment Products](https://static.news.bitcoin.com/wp-content/uploads/2021/07/grayscale-defi-fund1-768x432.jpg)
Crypto investment giant Grayscale has launched a new Decentralized Finance (DeFi) Fund in partnership with CoinDesk Indexes. It’s the crypto asset manager’s 15th investment product and will feature 10 different assets in a market-capitalization weighted portfolio designed to track the CoinDesk DeFi Index. As of Monday, the same day as the fund’s launch, Grayscale already […]
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Grayscale Investments is set to float a fund targeting blue-chip assets in the decentralized finance space.
Michael Sonnenshein, CEO of digital asset management giant Grayscale, has announced a new investment vehicle for the firm targeted at decentralized finance (DeFi) assets.
Sonnenshein announced Grayscale’s planned DeFi Fund and Index during an appearance on CNBC’s Squawk Box. Detailing the purpose of the new product, the Grayscale CEO said the fund would offer exposure to DeFi assets, such as Uniswap (UNI) and Aave, for its institutional clients.
According to the Grayscale chief, the decision to create a DeFi fund, the firm’s 15th crypto investment product, was due to the growing interest in popular crypto assets in the decentralized finance space.
With institutional interest in crypto showing signs of diversification away from only Bitcoin (BTC), both Ether (ETH) and DeFi assets are reportedly beginning to come up in the conversation. Back in April, Cointelegraph reported that DeFi money markets were increasingly becoming more appealing to institutional investors.
With more regulated entities entering the DeFi space comes increased talk of regulations for the niche crypto market sector. Some industry stakeholders even say greater regulatory clarity is required for the DeFi space to interact with real-world assets.
Commenting on other institutional investment possibilities for crypto, Sonnenshein stated that a Bitcoin exchange-traded fund (ETF) approval in the United States will eventually happen. As previously reported by Cointelegraph, the Grayscale CEO remarked that the market was a “couple of points of maturation” away from seeing an approved ETF.
Related: Grayscale ‘100% committed’ to turning GBTC into Bitcoin ETF — CEO
Indeed, Grayscale is reportedly working with BNY Mellon toward converting its Bitcoin Trust into a Bitcoin ETF. According to Sonnenshein, the crypto asset manager is 100% committed to turning its flagship GBTC product into a Bitcoin ETF.
The U.S. Securities and Exchange Commission has yet to approve any Bitcoin ETF in the country. Earlier in July, the SEC pushed back its decision on Wisdom Tree’s Bitcoin ETF application.
Crypto investment giant Grayscale is teaming up with the Bank of New York Mellon Corporation (BNY Mellon) as it awaits approval of its proposed Bitcoin exchange-traded fund (ETF). The crypto asset manager says in a press release that the New York-headquartered bank will provide fund accounting and administration services for GBTC starting in the fourth […]
The post Grayscale Teams Up With Banking Giant BNY Mellon in Bid for Bitcoin ETF appeared first on The Daily Hodl.
On-chain data shows two dramatic declines in the Bitcoin reserves held by a Canadian Bitcoin fund but there's a catch.
A Canada-based Bitcoin fund, operated by 3iQ Corp, has witnessed a dramatic decline in its BTC reserves since June.
Literally named the Bitcoin Fund (QBTC:CN), the closed-end investment product, was holding around 24,000 BTC in its vaults in early June. However, as the monthly session progressed, the reserves first dropped to below 16,000 BTC in a dramatic, straight-line decline.
Later, another massive withdrawal pushed the Bitcoin Fund's BTC reserves to around 13,000 BTC, according to on-chain data from South Korea-based analytics firm CryptoQuant.
However, the withdrawals from the QBTC fund across June coincided with an inflow spike in 3iQ's exchange-traded fund (ETF), called 3iQ CoinShares Bitcoin ETF (BTCQ). In detail, the Canadian ETF attracted inflows of 2,088 BTC in June 2021 against the QBTC outflows of 10,432 BTC in the same month.
ByteTree CIO, Charlie Morris, noted that 3iQ allowed its clients to convert their QBTC units into 3iQ CoinShares Bitcoin ETF. He added that the growth of crypto ETFs across major stock exchanges—which allows redemptions and withdrawals—prompted investors to reduce their exposure in the closed-ended fund.
In comparison, 3iQ's top rival, the New York-based Grayscale Bitcoin Trust (GBTC), did not witness declines in its BTC reserves. Grayscale Investments has closed GBTC since February, citing "administrative purposes." The closed-end fund does not allow redemptions and withdrawals.
Additionally, data collected by ByteTree Asset Management shows that the 90-day inflow into the United States and Canada-based Bitcoin funds has dropped to 12,794 BTC compared to 191,846 BTC in January 2021, a 93.3% decline.
The 3iQ CoinShares Bitcoin ETF (BTCQ), despite attracting 2,088 BTC in June 2021, has so far experienced outflows of 354 BTC in July 2021.
Fund reserves reflect rising and declining institutional interest in Bitcoin. That is primarily because these investment products tend to work provide accredited investors ways to gain indirect exposure to crypto markets by issuing shares backed by real Bitcoin sitting in vaults.
Thus, as the Bitcoin reserves on average drop across the funds, it typically suggests a lower demand for cryptocurrencies among institutional investors.
Institutional investors reducing their exposure in the Bitcoin funds coincide with the Federal Reserve's hawkish signals at the end of June's Federal Open Market Committee's meeting.
In detail, the U.S. central bank said mid-June that it could hike interest rates by the end of 2023 to contain prevailing inflationary pressures. It referred to the US consumer price index (CPI), a gauge to measure inflation, that surged 0.6% in May 2021 to reach a three-decade high of 4.5%; CPI climbed another 0.9% in June to reach 5.4% at its fastest pace in the last 13 years.
Since the Fed's outlook, Bitcoin has dropped below $32,000. However, the flagship cryptocurrency has mostly remained inside the $30,000-34,000 price range, suggesting a mixed outlook among retail and institutional investors about the cryptocurrency's next directional bias.
The bias conflict emerges despite popular narratives that pose Bitcoin as an ultimate edge against rising consumer prices. The record goes like this: Unlike the U.S. dollar or other fiat currencies, Bitcoin comes with a limited supply of 21 million tokens, which makes it scarcer than inflationary currencies, and in turn, more valuable in the long run.
But Bitcoin has reacted negatively to rising inflation in the previous months, prompting critics to question its safe-haven narrative, at least in the short term. For instance, Fortune covered a special section on Bitcoin's erratic response to surging consumer prices, stating that the cryptocurrency is now marching "to its own drummer."
Eric Diton, president and managing director of The Wealth Alliance, noted that Bitcoin had become an overvalued asset after rising from below $4,000 to a record $65,000 in almost a year. However, based on how far the cryptocurrency has come, its prices have to correct before continuing higher.
Nevertheless, a Bank of America survey of fund managers also found "long Bitcoin" among their most crowded trades, alongside long ESG and long commodities.
As Cointelegraph reported, traders are now closely watching the last major unlock dates over the next few days and weeks due to their potential impact on the cryptocurrency market.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The new agreement further reinforces Grayscale’s commitment to converting Grayscale Bitcoin Trust into an ETF as its strategic goal.
The bank of New York Mellon, America’s oldest bank, has signed an agreement with cryptocurrency asset manager Grayscale Investments to provide a set of services to its flagship Bitcoin (BTC) investment product.
Grayscale officially announced Tuesday that it selected BNY Mellon as an asset servicing provider for Grayscale Bitcoin Trust (GBTC), a major digital currency investment product providing indirect exposure to Bitcoin.
BNY Mellon is also expected to provide transfer agency and exchange traded fund-related services for the GBTC upon its conversion to an ETF, Grayscale noted. As part of the agreement, BNY Mellon will provide GBTC with fund accounting and administration effective Oct. 1, 2021.
The agreement aims to further improve Grayscale’s GBTC in terms of scalability, resiliency and automation through BNY Mellon’s platform, including the bank’s proprietary ETF center that offers technology specifically designed to support digital asset ETFs. The new development is also an important milestone for Grayscale as it reinforces the company’s commitment to converting GBTC into an ETF as its strategic goal, Grayscale CEO Michael Sonnenshein said.
Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, noted that the bank’s relationship with Grayscale “stands squarely at the intersection of trust and innovation.”
“It’s another critical milestone in our rapidly growing digital asset capabilities and broader strategy of putting client choice at the center of everything we do,” he added.
Related: Grayscale publishes roadmap for turning its products into crypto ETFs
Grayscale’s GBTC is not the only potential ETF that is expected to involve BNY Mellon’s expertise. In 2019, BNY Mellon was appointed to serve as transfer agent and administrator of Bitwise Asset Management’s proposed Bitcoin ETF.
As previously reported, the United States regulators have not yet approved a Bitcoin ETF, having delayed multiple regulatory decisions on such products in recent months. Other global jurisdictions like Canada and Brazil have already launched several Bitcoin ETF products, including ETFs by Canadian asset manager 3iQ, European firm CoinShares, and Brazilian asset manager QR Asset Management.