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Ethereum is next on Grayscale’s to do list

Photo of: Joseph Stone
by Joseph Stone

While Bitcoin is certainly attracting attention, Ethereum is also experiencing growing investor adoption. For a new group of investors, Ethereum is the first choice, and sometimes the only one according to Grayscale’s boss.

The CEO of CoinShares stated on CNBC that holding Bitcoin in his institutional portfolio could once be detrimental to a fund manager’s career. However, the trend is reversing.

Thus, neglecting this asset could now be a severely punishable mistake. But Bitcoin might not be the only cryptocurrencies to be taken into account. For the CEO of the crypto-asset management giant, Grayscale, Ethereum is also experiencing strong growth.

Michael Sonnenshein thus sees a considerable increase in a new category of investors this year.

“In the year 2020 we see a new group of investors who are first and in some cases only Ethereum”, he tells Bloomberg.

“There is a growing conviction around Ethereum as an asset class”, he adds. After filling up his Bitcoin fund, Grayscale now hopes to do the same with his Ethereum counterpart.

Since Q3, the Grayscale Ethereum Trust has been acquiring an average of $15.6 million worth of Ether each week. This is significantly less than for the Bitcoin Trust (55.3 million), but growth is strong nonetheless.

Over one year, Ethereum is the company with the highest capital gain with a gain of 360%, against 170% for Bitcoin. ETH is now flirting with the $600 mark and is also experiencing its bull run, just like Bitcoin.

The Ethereum blockchain benefits in particular from its central position in DeFi. 2020 is indeed the year of the boom in decentralized finance. Over the course of the year, DeFi’s Total Value Locked increased from $1 billion to $13 billion.

Institutional investors, without being directly exposed to cryptocurrencies, thus acquire shares in the Grayscale Ethereum Trust. The latter has 29.6 million shares, compared to just 5.2 million at the end of 2019.

“The development of the asset class has continued to consolidate,” Michael Sonnenshein points out. “Ethereum has the same strength as Bitcoin,” he continues. Sunny days ahead for Ethereum!