Everipedia Logo
Everipedia is now IQ.wiki - Join the IQ Brainlist and our Discord for early access to editing on the new platform and to participate in the beta testing.
Grayscale Investments

Grayscale Investments

Pomp Podcast #336: Grayscale CEO Michael Sonnenshein On Investing In Crypto

Pomp Podcast #336: Grayscale CEO Michael Sonnenshein On Investing In Crypto

Grayscale Investments is a digital currency investing services company. The company provides market information, investment exposure, and investment products to the developing digital currency asset class.[1] As of January 26, 2021, the firm holds over $25 billion in assets under management.[24]


Grayscale Investments

Grayscale Investments

Looking at Grayscale Bitcoin Trust

Looking at Grayscale Bitcoin Trust

Grayscale Investments was created in 2013 by the Digital Currency Group.[2]

In March 2017, Grayscale managed $208 million worth of investments in the Grayscale Bitcoin Investment Trust.

By March 2018, the company had created investment trusts for Ethereum, Litecoin, XRP, Bitcoin Cash, and Zcash in addition to Bitcoin. By that time, Grayscale was managing more than $2.1 billion in cryptocurrency investment trusts.[4][5]

The company launched an investment trust for Zen, a privacy-focused digital currency similar to Zcash, in June 2018.[6] The following month, it launched an investment trust for Ethereum Classic.[7]

Grayscale announced in a November 19, 2019 blog post that it had applied to the U.S. Securities and Exchange Commission (SEC) for the Bitcoin Investment Trust to be designated an SEC reporting company and to register its shares pursuant to Section 12(g) of the Securities Act. The company noted that, if approved, the trust would report financial results according to SEC standards. The blog post also stated that approval would not make the shares in the trust eligible for trading on an exchange, as if it were an ETF.[8]

In January 2020, Form 10 became effective, and Grayscale Bitcoin Trust become the first digital currency investment vehicle to have the status of an SEC reporting company.[15]

On April 16, 2020, Grayscale released its 1Q20 Grayscale Digital Asset Investment Report, a comprehensive report that highlights investment activity across the Grayscale family of products.

During the first quarter of 2020, Grayscale raised $503.7 million into its investment products, marking the largest capital inflow in a single quarter in the firm's history.

Grayscale Bitcoin Trust continued to lead investment demand, with record inflows of $388.9 million in 1Q20.

The majority of investment continued to come from institutional investors, accounting for 88% of investment in 1Q20. Additionally, more investors continue to broaden their digital asset exposure, with 38% of investors have now invested in multiple Grayscale products.[16]

During the last week of June 2020, Grayscale Investments added 19,879 BTC to its Bitcoin Trust, purchasing Bitcoin faster than the tokens can be mined.

As of June 26, 2020, there were 18.415 million BTC in circulation, with the rest presumed lost.

Grayscale bought 53,588 BTC in total since the May 11 halving, equating to an average of 1,190 BTC per day.

If it keeps buying at this same daily rate it will own 3.4% of the world’s BTC supply (625,069 BTC) by January 2021 - and 10% by the time of the next halving in 2024.

A large portion of BTC is being sent to Grayscale by funds who are essentially arbitraging the "grayscale premium" .

Those who send BTC worth market price to Grayscale can earn 5-20% profit because of the Greyscale premium after a 6-month lockup.


Grayscale announced that it had $4.1 billion in assets under management as of June 25, which means Grayscale's value has nearly doubled from $2.1 billion in May 2019.

In addition, Grayscale's Ethereum Fund (ETHE) owns $396 million in Ether.

CoinTelegraph reported that Grayscale had purchased $110 million worth of Ethereum (ETH) in 2020 as of June 5.[17]

From July 17th - July 28th the value of Grayscale's holdings increased by roughly $1,000,000,000.

After Bitcoin surged and other altcoins followed suit, Grayscale gained $782 million in its BTC trust and $174 million in its ETH trust. [22]

On October 12, 2020, Grayscale Investments' Ethereum Trust officially became an SEC reporting company which will increase transparency.

The Ethereum Trust will begin to regularly disclose the amount of money flowing through its passive ETH investment.

Additionally, contrary to the typical twelve-month lockup, accredited investors will now be able to sell after six months.

Grayscale’s Ethereum trust is the firm's second crypto vehicle with shares registered under the Exchange Act of 1934, after its Bitcoin Trust became effective as a reporting company in January 2020.


In January 2021, Michael Sonnenshein became the firm's new Chief Executive Officer. Sonnenshein was previously the company’s managing director. Barry Silbert, Grayscale's original CEO, is moving on to focus on the efforts of the parent company Digital Currency Group, which he founded in 2015. Sonnenshein has been at Grayscale for seven years, starting in 2014. Before that, he spent several years in more junior roles at Bank of America, Barclays, and J. P. Morgan.[34]

Silbert said in the announcement:

“Grayscale has been at the vanguard of bringing digital currencies to the mainstream, and I could not be more proud of the results the team has achieved since the firm was founded.

When Michael joined the firm seven years ago, we had one product and $60 million in assets under management.

Today, investors from around the world can access 10 products, and the firm is managing more than $20 billion in assets.

That accomplishment would not have been possible without Michael’s unrelenting passion for our business and his commitment to making the digital currency asset class available to a broader base of investors.”[35]

In January 2021, Michael Sonnenshein, CEO of Grayscale Investments, tweeted the firm raised more than $700 million on Jan. 15, seeing increased momentum from Q4 2020. In Q4 2020, the company raised $3.3 billion across its cryptocurrency investment vehicles. The Grayscale Bitcoin Trust led the pack in Q4 with an average of $217 million raised every week. The latest data from Grayscale showed on January 15 the firm had a record $27.1 billion under management while it entered 2020 with just $2 billion.[38][39]


In January 2021, Grayscale pledged $1 million to Coin Center, Washington, D.C.’s most influential cryptocurrency advocacy group. The million-dollar donation was announced in a press release, which also revealed Grayscale’s plan to match contributions to Coin Center through the end of February. Over that period, Grayscale plans to match donations dollar-for-dollar up to an additional $1 million.[36][37]


Grayscale's Michael Sonnenshein: Here's Why Bitcoin Is Gold 2.0 | CNBC

Grayscale's Michael Sonnenshein: Here's Why Bitcoin Is Gold 2.0 | CNBC

Grayscale Investments manages a number of investment trusts, which it refers to as private "investment vehicles," for large amounts of Bitcoin, Bitcoin Cash, Ethereum Classic, Litecoin, Horizen, XRP, Zcash, and Stellar Lumens. Grayscale also manages the Grayscale Digital Large Cap Fund, a market-cap-weighted fund consisting of a basket of the biggest cryptocurrencies by market cap using several digital asset reference rates - TradeBlock XBX, ETX, XRX, BCX, and LTX Index 24-hour VWAPs. These trusts, or "vehicles" are passive investment funds, which track the prices of each digital asset in real-time using digital trade algorithms. GBTC specifies on its website that only "accredited investors as defined under Regulation D of the Securities Act of 1933" are permitted to invest in any of their investment vehicles.[10]

Grayscale Investments announced that it would be adding support for Stellar through the "Stellar Lumens Trust" in January 2019.

In May 2019, FINRA approved Grayscale's proposal to publicly list shares for an Ethereum-based trust, making it the first publicly-quoted security tied to Ethereum.

Grayscale planned on launching trading for shares of the trust under the ticker ETHE sometime in early June 2019.[11]

In the July 20, 2020 announcement, Grayscale said the Financial Industry Regulatory Authority (FINRA) in the United States had verified shares of the firm's Bitcoin Cash Trust and Litecoin Trust were ready to begin being quoted in OTC markets. The two stocks will soon be available for public trading under the symbols BCHG and LTCN. Public trading for the two digital assets remains subject to full compatibility with the Depository Trust Company (DTC), the world's largest securities depository. Grayscale reported that as of June 30 it has 2,725,300 shares in its Bitcoin Cash Trust for $5.8 million assets under management and 509,400 shares of the Litecoin Trust totaling $2 million. [21]


Grayscale announced on August 2, 2019, that it had selected Coinbase Custody to serve as the custodian for the digital assets underlying its products.[12] The agreement was effective July 29, 2019, and Grayscale had already transferred some assets to the custodian by the time of the announcement.[13] Grayscale was expected to transfer about $3 billion in assets to Coinbase Custody over an approximately 12 hour period, one of the largest transfers of cryptocurrency ever.[14]


Citation Linkwww.bloomberg.comGrascale on Bloomberg
Jun 29, 2020, 7:45 PM
Citation Linkwww.linkedin.comGrayscale on LinkedIn
Jun 29, 2020, 7:45 PM
Citation Linktwitter.comGrayscale on Twitter
Oct 12, 2020, 8:58 PM
Citation Linkwww.coindesk.comXRP, BCH, LTC & ETH: Grayscale Adds 4 New Crypto Trusts
Jun 29, 2020, 7:59 PM
Citation Linkwww.forbes.comZCash Investment Trust Launches, Expanding Investor Options For Cryptocurrency Exposure
Jun 29, 2020, 8:00 PM
Citation Linkfinance.yahoo.comGrayscale announces new fund around a privacy-based crypto
Jun 29, 2020, 8:00 PM
Citation Linknews.bitcoin.comGrayscale to Launch Ethereum Classic Trust, Modeled After Bitcoin Investment Trust
Jun 29, 2020, 8:03 PM
Citation Linkmedium.comGrayscale Bitcoin Trust’s Step Forward with SEC Filing
Jun 29, 2020, 8:04 PM
Citation Linkgrayscale.coGrayscale® Digital Large Cap Fund
Jun 29, 2020, 8:17 PM
Citation Linkwww.theblockcrypto.comFINRA approves Grayscale Ethereum Trust for retail
Jun 29, 2020, 8:24 PM
Citation Linkwww.globenewswire.comGrayscale Selects Coinbase Custody as Custodian
Jun 29, 2020, 8:25 PM
Citation Linkwww.coindesk.comGrayscale’s $2.7 Billion in Crypto Assets Will Now Be Held by Coinbase Custody
Jun 29, 2020, 8:26 PM
Citation Linkwww.forbes.comGrayscale To Move Billions In Bitcoin, Ripple's XRP, Ethereum And Litecoin To Coinbase In One Of The Largest Ever Crypto Transfers
Jun 29, 2020, 8:26 PM
Citation Linkmedium.comTop 6 Things to Know About Grayscale Bitcoin Trust Now That it’s an SEC Reporting Company
Jun 29, 2020, 8:32 PM
Citation Linkwww.globenewswire.comGrayscale Investments Announces Strongest Quarter Ever with Half a Billion Raised in First Quarter
Jun 29, 2020, 8:34 PM
Citation Linkcointelegraph.comAt This Rate Grayscale Will Own 3.4% of All Bitcoin by January
Jun 29, 2020, 8:40 PM
Citation Linkwww.youtube.comLooking at Grayscale Bitcoin Trust
Jun 29, 2020, 8:46 PM
Citation Linkwww.youtube.comGrayscale Investments
Jun 29, 2020, 8:47 PM
Citation Linkcointelegraph.comGrayscale Receives FINRA Approval for BCH and LTC to Trade Publicly
Jul 27, 2020, 9:05 AM
Citation Linkcointelegraph.com
Jul 30, 2020, 2:20 AM