Crypto investment firm Grayscale sees 900% jump in assets to $20 billion amid bitcoin frenzy

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Grayscale saw its assets skyrocket this year as Wall Street used it as a proxy to invest in bitcoin.

it to putting money behind tech giants like Apple and Google. Stanley Druckenmiller and Bill Miller are among the other high-profile bitcoin bulls. Their backing, analysts say, has given Wall Street more confidence to invest.

Institutional demand has been cited as a key reason for bitcoin topping $40,000 last week and a triple-digit rally last year. Sonnenshein said those professional investors often don't have the legal or "operational wherewithal" to buy and hold cryptocurrencies safely.Many professional investors see it as an alternative to established safe-haven assets, such as gold, and a hedge against "perpetual money printing" by central banks, Sonnenshein said.

At the same time as $3 billion flowed into the Grayscale Bitcoin Trust since mid-October, gold ETFs lost $7 billion, according to JPMorgan. A strategist for the investment bank also told clients in a note last week that a bitcoin ETF could weigh on prices in the short-term, and spark outflows from Grayscale. In response to the analyst note Sonnenshein, a former JPMorgan associate, said an ETF is likely to be approved but wouldn't pull interest from Grayscale.

 

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