Largest crypto investment manager tops $10 billion in assets

NEW YORK (Reuters) - The world’s largest digital currency asset manager Grayscale said on Wednesday its assets under management soared to a record $10.4 billion, bolstered by the continued rise in investment inflows as well as the surge in the price of bitcoin.

Bitcoin on Wednesday jumped to $18,483 BTC=BTSP, the highest level since December 2017. It has appreciated about 160% this year and gained 17% in the last three days.

The virtual currency is now close to its all-time peak of just under $20,000 at the height of its retail investor-fueled 2017 bubble.

Grayscale’s assets grew 76% from $5.9 billion at the end of the third quarter. Its bitcoin fund hit nearly $9 billion in assets on Wednesday, up 85% from that in the third quarter.

The investment manager recorded its largest ever inflows of more than $1 billion in the third quarter, according to its quarterly update. Since the beginning of 2020 to the third quarter, investments into Grayscale reached $2.4 billion, more than double the $1.2 billion cumulative inflows into its funds from 2013-2019.

“While we’re only midway through the fourth quarter, I can certainly share that momentum has continued to carry through to the fourth quarter and probably accelerated a bit to what we have seen in Q3,” Michael Sonnenshein, managing director at Grayscale told Reuters in an interview.

The bitcoin fund represents about 80% of the assets it manages.

Sonnenshein said the market for bitcoin has matured and he expects a steady climb in its price, noting a much more two-sided trading space with the development of ancillary services such as derivatives and cryptocurrency lending.

“For a lot of investors, bitcoin has a lot of staying power and it has overcome so many challenges and so many instances when it has been called dead,” Sonnenshein said.

Its next largest fund -- the Grayscale Ethereum Trust -- posted assets under management of $1.2 billion on Wednesday, up more than 50% from $806 million at the end of the third quarter.

Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio