Grayscale Investment, operators of the largest crypto hedge fund, is close to reaching a $5B valuation after adding $500M to its assets under management (AUM) is less than a week. Meanwhile, other cryptocurrency funds like Tetras Capital are shuttering after low returns despite market-wide recovery since Black Thursday.
Grayscale Crypto Fund AUM at $4.8B
Tweeting on Monday, Grayscale revealed that its crypto fund AUM was currently at $4.8B. Comparing with the figures from five days ago, it appears that there has been an additional $500 million.
07/27/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@GrayscaleInvest) July 27, 2020
The surge in Grayscale’s crypto fund AUM comes amid Bitcoin’s recent price gains. As reported by CryptoPotato, the price of the flagship cryptocurrency crossed the $11,000 mark after weeks of sideways accumulation, being range-bound between the $9k-$9.2k price bands.
Bitcoin shares (GBTC) still dominate Grayscale’s AUM at $4B, followed by ETH at $580M. Other altcoins are also seeing interest from institutional investors, with Bitcoin Cash, Ethereum Classic, and Litecoin at $9.4M, $79M, and $7.7M, respectively.
The total Grayscale Litecoin Trust has seen an additional growth of $2M within the same period. This growth in the LTCN pot comes barely a week after a similar $3.5M top-off likely pointing to a growing institutional appetite for the “coin” known as the silver to Bitcoin’s gold.
Tweeting on Tuesday, Litecoin creator Charlie Lee noted that LTC has been able to maintain its positive ratio against BTC despite the latter being on a tear over the last 48 hours. As of the time of writing, Litecoin is best-performing top-10 altcoin, up by almost 15% in the last 24 hours.
Crypto Hedge Funds Experience Mixed Fortunes
Grayscale’s Q2 report revealed that the digital asset management company bought $750M worth of Bitcoin in the second quarter. In July, the U.S. Financial Industry Regulatory Authority (FINRA) gave the green light for Grayscale to offer shares of Bitcoin Cash Trust and Litecoin Trust for public trading.
While Grayscale appears to be the preferred channel for institutional investors looking for exposure to cryptocurrencies, some crypto hedge funds appear to be facing difficulties. Tetras Capital recently shut after struggling to stay afloat.
The Black Thursday decline saw crypto hedge funds suffer significant declines. As reported by FT back in May, many crypto funds were still struggling to recover from the haircut they took in their asset valuations months after the mid-March flash crash.