Bitcoin (BTC) has “solidified” its role in the world economy as both a store of value and “digital gold,” the head of the world’s largest BTC fund has said.
Grayscale: institutions think BTC is a “flight to safety”
In complete contrast to even two years ago, in 2020, institutional investors consider it necessary to have the cryptocurrency in their portfolios.
“Bitcoin itself has solidified its role as a store of value or as a digital gold,” he said.
“So I talk to an institution, they now look at Bitcoin as part of the same flight to safety as they might look at bonds or gold or other things that have served in that capacity for them, and that wasn’t a widely-held narrative probably until about the last 12 or 18 months.”
In 2019, Grayscale’s Bitcoin Investment Trust (GBTC) was the second most liquid over-the-counter, or OTC, market. As Cointelegraph reported, the company’s fortunes have gone from strength to strength as investors increasingly focus their attention on regulated Bitcoin products.
The company’s Bitcoin assets under management currently involve around 1.5% of all the Bitcoin in existence, or $3 billion.
Grayscale became a reporting company with United States regulator, the Securities and Exchange Commission (SEC), in January, and Sonnenschein believes the tide is gradually turning in favor of crypto businesses engaged in compliant activities.
The SEC approving a Bitcoin exchange-traded fund, or ETF, for example, is “a matter of ‘when,’ not ‘if,’” he forecast.
A window for altcoins?
“There is ever-growing evidence that this asset class is not going away — investors want access to it, and if the legacy institutions want to remain competitive, they’re going to have to open the door to this asset class for their clients.”
With Grayscale offering a total of ten crypto funds, he nonetheless shied away from privileging Bitcoin over altcoins. Controversial Bitcoin Cash (BCH), he argued, was simply trying to solve other problems to Bitcoin itself.
“Over time, we don’t know who will be the winner,” he said.