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Stone Ridge buys 10,000 BTC worth $115 million

Photo of: Janeth Diamond
by Janeth Diamond

This is certainly big for Bitcoin especially when the background has been set by many institutional investors for big-time investments in the world’s most popular crypto. And after many enterprises have taken a wide interest in investing in Bitcoin to hedge against inflation risks and as a store of value, Stone Ridge, the big-ticket billion-dollar Asset management firm has reportedly accumulated $115 million worth of Bitcoin. 

The asset manager of the firm has confirmed that the firm had deployed the funds to purchase the coins, but when this journey started has not been disclosed by the firm. Through its partially-owned subsidiary New York Digital Investment Group (NYDIG), the Stone Ridge Holdings group has accumulated 10,000 Bitcoins which are valued at approximately $115 million at today’s prices.

New York Digital Investment Group (NYDIG) and its subsidiaries possess a BitLicense and a New York trust charter which will let it offer the custody service to institutional clients. It has been known to serve clients that have been involved in bigger cryptocurrency investments relative to what Stone Ridge Asset Management has invested in. 

The investment decision has not been instant but a result of the efforts of planning from the past three years. Back in 2017, the employees of Stone Ridge were known to accumulate lots of Bitcoin which later forced the auditors to look into the crypto. Now, due to the Covid-19 pandemic has accelerated the pace of the company’s involvement in the space. Gutmann explained:

“The macro backdrop against the public health backdrop has caused a lot of people to rethink their portfolio composition.” This was a direct reference to the oncoming inflationary trends as well as the chaos triggered by the pandemic.

Prior to this news, a lot of prominent institutional investors had already entered the space. In the last two months, Microstrategy had accumulated $425 million worth of Bitcoin. Last week Square also used a part of its asset allocation funds for Bitcoin. Much before these events took place, hedge fund investor Paul Tudor said that he had allocated 2% of his net worth to bitcoin futures. 

Fidelity investments, a $2 Trillion asset management organization has highlighted how in recent years the interest of institutional investors has increased. According to the investment firm, there could be four to five catalysts that drive investment in Bitcoin. These factors include monetary stimulus by Central Banks, inciting inflationary tendencies, wealth preservation perspectives of the client, and also the role of Millenials who are getting inheritances in trillions that they deploy into Bitcoin.

The companies and investors who have already absorbed thousands of coins, the institutional involvement will continue in the times to come. In a survey of 800 institutions across the US and Europe, Fidelity found out that almost 80% of the investors find the idea as well as investments in digital assets appealing. Also, 60% of the investors believe that any digital asset be it Bitcoin or any other, they surely have a place in investment portfolios in today’s times.