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Grayscale CEO Believes SEC Leashing Crypto Hampers Its Growth

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Undoubtedly, US regulators have taken steps to safeguard bitcoin investors. But lately, a lot of red flags have been raised by neighborhood residents. There were rumors that something “huge” would be announced when the Department of Justice first said it would “announce a major, international cryptocurrency enforcement action.”

That wasn’t the case, though. Community members were incensed by the government’s action against the less well-known cryptocurrency exchange Bitzlato. In fact, some openly questioned whether the most recent event was intended to divert attention from the fact that they had no reason to suspect anything about FTX.

Grayscale CEO Highlights SEC’s Regulation Repercussions

Even established members of the group began sharing their perspectives about the matter, apart from the community. Grayscale executive Michael Sonnenshein criticized the SEC’s “one-dimensional approach of regulation by enforcement” in a letter to the Wall Street Journal.

He agreed with the claim that the SEC had been “late to the game” when it came to regulating the cryptocurrency market. The CEO of Grayscale also stated that the SEC should “certainly try” to get rid of dishonest people. However, he emphasized that it shouldn’t be done “at the expense of efforts to develop appropriate regulation.”

Outlining the effects and demonstrating how it has impeded the industry’s expansion, he remarked,

“The SEC’s inaction has prevented Bitcoin’s advancement into the US regulatory perimeter, often forcing U.S investors offshore with less protection and oversight… We are seeing the consequences of the SEC’s priorities play out in real-time—at the expense of U.S. investors.” 

Grayscale filed a lawsuit against the SEC in the middle of 2022 after it rejected its request to convert its Bitcoin trust into a spot-based Exchange Traded Fund.

Grayscale submitted documents to the SEC in October of last year in order to turn its Bitcoin Trust into an ETF. Following several extensions, the regulatory agency on Wednesday issued a rejection decision. Likewise, Grayscale’s application did not address the regulator’s concerns regarding how it would guard against market manipulation and safeguard the interests of investors and the general public.

Grayscale decided to quickly traverse legal waters when the rejection order was issued. The CEO of Grayscale, Michael Sonnenshein, announced on Twitter that a lawsuit had been filed to contest the SEC’s judgment.

Grayscale Refuses To Show On-Chain Proof Of Reserves, Citing Security Concerns

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Investors are understandably curious about their cryptocurrency investments. To answer these questions, Grayscale Investments LLC, a digital currency investment service provider, made an announcement on Twitter regarding the safety and security of its assets on November 18th.

Crypto Exchange FTX filed for bankruptcy last week after it lost the public’s confidence in its accounting of billions of dollars. In the wake of this disaster, Proof-of-Reserves, an approach where exchanges display their balance, has been brought up again to regain investors’ faith.

Nine other exchanges, including KuCoin, OKX, and Gate.io, made similar plans after Binance disclosed its intentions to share a proof-of-reserves. Others, like BitMEX, stated they will testify to the reserves directly, while some, like Gate.io, chose auditor-assisted proof-of-reserve validation.

However, Grayscale has cited “security concerns” as the reason for declining to offer on-chain proof of reserves or wallet addresses of its digital currency products.

The company said:

Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure.

Grayscale Says It “Takes Transparency Seriously”

The company stated that it takes transparency seriously and has a long history of cooperating positively with authorities to increase complete and equitable risk disclosures for its digital asset offerings.

According to the statement:

The holdings of Grayscale’s digital asset products are safe and secure. Balances are reflected in historical public filings and have been evaluated by our third-party auditors.

In addition, each of the company’s digital asset products is established as a different legal entity from one another, “a statutory trust for single asset products and a limited liability company for diversified products.”

Moreover, the company highlighted that as a custodian for each product, Coinbase Custody holds all of the digital assets that underpin its digital asset offerings.

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Grayscale Refuses To Show On-Chain Proof Of Reserves, Citing Security Concerns 2

Grayscale’s digital asset offerings are governed by laws, rules, and legal agreements that forbid lending, borrowing, and other forms of encumbrance on the digital assets that underlie the products.

Related Reading | Crypto Miners In Russia To Get The Green Light To Sell On Global Markets

Grayscale Investments Unveiled Europe’s First ETF

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The world’s largest digital asset manager Grayscale Investments’ plan of expanding its footprint in the European market got a new lease of life as it announced its first European ETF called Grayscale Future of Finance UCITS ETF [ticker: GFOF].

The newly launched ETF is slated to be listed on the London Stock Exchange [LSE}, Borsa Italiana, and Deutsche Börse Xetra will also be “passported for sale” across Europe.

For those unfamiliar, Passporting allows a firm registered in the European Economic Area [EEA] to set shop in any other EEA state without further authorization.

Coming back to the press release, the investment vehicle is designed to offer investors exposure to firms across domains like finance, technology, and digital assets – as well as firms shaping the digital economy, all through the familiar ETF wrapper.

In February 2022, Grayscale listed an ETF in the United States that tracks the investment performance of the Bloomberg Grayscale Future of Finance Index.

Speaking on the historic launch, Grayscale Investments CEO Michael Sonnenshein stated,

We announced our first ETF earlier this year in partnership with Bloomberg as part of the expansion of our business. With growing global demand from both institutional and individual investors for Grayscale products, we’re thrilled to be expanding our offering in Europe through the UCITS wrapper.

“This product draws upon our historical strengths while furthering our evolution as an asset manager that helps investors build portfolios that can stand the test of time. GFOF UCITS ETF is the natural next step in our global strategic journey,” he added.

The investment firm’s plan to enter Europe’s crypto market was the result of a number of meetings held with local partners, Sonnenshein said.

Grayscale’s Tussle With SEC

The European crypto fund market has become more competitive in recent months, with the arrival of several rival exchange-traded products [ETP] being listed in Switzerland, Germany, and elsewhere by firms such as 21Shares.

As of March, 73 crypto ETPs had been granted approval in Europe, with a total of $7 billion in assets.

Apart from making a mark in this market, Grayscale is also seeking to convert its bitcoin trust into an ETF in the U.S. but has been frustrated by the Securities and Exchange Commission [SEC].

The U.S. markets regulator has so far green signaled 4 BTC future ETFs but none that invest in the crypto directly.

Solana [SOL] gains over 9% Intraday, heading for another Rally?

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After recovering from a steep correction, Solana [SOL] managed to hold the ground, registering a 9.06% surge in the last 24 hours and reaching $220 by mid-day on the 1st of November 2021. Interestingly, the price surge took place in the backdrop of the major asset management firm, Grayscale Investment’s announcement of adding SOL to its investment portfolio, yesterday on its official Twitter handle.

At the time of writing, SOL’s price was trading at $217.50 with a 24-hour trading volume of $3.14 billion. The asset rose by 8.10% in the last 24 hours. It is currently ranked at #5, with a market cap of $66 billion as per data on Coinmarketcap.

What do Solana [SOL] price technicals indicate?

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Solana [SOL] gains over 9% Intraday, heading for another Rally? 5

From the four-hour chart above, the Relative Strength Index [RSI] indicator rising above the 50-median is leaning towards bullish tendencies as buyers resort to dominating the market. With regards to the Chaikin Money Flow, [CMF] cruising above the equilibrium layer is suggesting an increase in the capital inflow. Similarly, the green price bars of the Awesome Oscillator [AO] too reiterated the bullish narrative.

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Solana [SOL] gains over 9% Intraday, heading for another Rally? 6

With respect to the above daily chart, the price has been on an uptrend, as evident from candles hovering above the 50,100 and the 200-day moving average [DMA] that are acting as support from the further downtrend.

The recent decision by Grayscale Investments to add Solana into its product line would undoubtedly attract visibility from high-net-worth and institutional investors. The reason behind that is Solana’s tremendous growth as a blockchain project in 2021. The layer-one protocol emerged as a top contender against a behemoth like Ethereum, after providing users with one of the lowest cost and fastest transaction speed public ledgers.

Despite its price uptrend, market speculators however warn that the native token might face some serious hurdles due to issues such as ‘excessive valuations on longer-timeframe charts and the chances of network outages’

Solana [SOL] and Uniswap [UNI] to debut in Grayscale investments

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Solana and Uniswap have gained tremendous traction of late. Now, a leading digital asset manager is gearing up to roll out all-new investment vehicles to provide more exposure to new assets. Grayscale Investments has announced the revised updated fund offerings that include Solana [SOL] and decentralized finance token Uniswap [UNI] for the first time.

The newest entries join the elite list of the portfolio known as Grayscale Digital Large-cap Fund [GDLC] that incorporates major crypto-assets like Bitcoin [BTC], Etherium [ETH], Cardano [ADA], along with a few others.

In a series of tweets, the New York-based company revealed that the GDLC fund has been adjusted by selling the current fund components corresponding to their ratios and exchanging them for Solana and Uniswap in an effort to diversify their portfolio for crypto investors.

The blog post also displayed the latest basket of crypto assets in accordance with their token and weightage.

Bitcoin (BTC), 62.19%
Ethereum (ETH), 26.08%
Cardano (ADA), 5.11%
Solana (SOL), 3.24%
Uniswap (UNI), 1.06%
Chainlink (LINK), 0.82%
Litecoin (LTC), 0.77%
Bitcoin Cash (BCH), 0.73%

It is to be noted that the Grayscale Digital Large-cap Fund, which amounts to $494 million in Assets under Management [AUM], has allocated Solana and Uniswap with 3.25% and 1.06% respectively. The digital large-cap portfolio aims to cover the top 70% of the cryptocurrency market and is subjected to review after every three months. The latest addition is reflective of the growing popularity of the tokens in recent times, especially Solana.

Solana’s [SOL] impressive price action

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Solana [SOL] and Uniswap [UNI] to debut in Grayscale investments 9

SOL has strengthened its position as the 7th largest cryptocurrency with a market cap of $46 billion and has followed a steady uptrend following the announcement of several projects on the layer one network that has caught the attention of crypto investors

Solana [SOL] reached an all-time high of $212 on 9th September this year in the backdrop of a dull market. While other cryptocurrencies have taken major hits, Solana has managed to avoid severe losses despite increased bearish pressure in the market. As October dawned, SOL’s price appreciated in response to the latest recovery in the broader market. This was evident from last week’s price chart showing a 12% surge. In the past 24 hours, its price increased by 10.75% and was now trading at $158.60.

Uniswap’s [UNI] underwhelming performance

UNI 1M graph coinmarketcap
Solana [SOL] and Uniswap [UNI] to debut in Grayscale investments 10

September has not been kind to the cryptocurrency industry and Uniswap was not an exception. UNI’s price has been underwhelming. This can be attributed to the dull network activity. For the most part, its clone Sushiswap outperformed the former across several metrics. As the market recovered, UNI followed suit with a 35% rise in the last week and an almost 2% increase in the past 24-hours. At press time it was trading at $25.76.

Digital Asset Fund Inflows Hit $4.2B In Q1; reports CoinShares

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Q1 institutional inflow breaks all previous records: CoinShares.

Despite signs of weakening institutional demand, which triggered fierce market-wide, crypto-asset funds and investment products have reached a milestone after hitting a record of $4.2 billion inflows already in the first quarter of the year. This was revealed by the latest CoinShares weekly report.

There are 15 more days to go and with the sudden drop in Bitcoin and the cryptocurrency market, it is speculated that more capital could be essentially be poured in to buy the dip.

Coming back to the stats shared by CoinShares, digital asset investment products closed on Friday with $55.8 billion assets under management. This was accompanied by the weekend bullish when Bitcoin established a fresh ATH nearing $62K. This reflected the institutional demand that had earlier surged to levels never seen before.

Despite the fact that Bitcoin has been the clear winner amongst the investors, Ethereum has also gained its fair share of popularity among the institutional market participants. Inflows to Bitcoin was found to be at $3.3 billion, while that of Ethereum stood at $731 million. The world’s largest altcoin tuned in an inflow of $113 million last week which comprised almost 50% of total flows.

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Digital Asset Fund Inflows Hit $4.2B In Q1; reports CoinShares 13

Grayscale Lead, CoinShares Seals 2nd Spot

Out of the five digital asset investment providers, Grayscale Investment led the score with the total AUM of $43.72 billion, followed by CoinShares with $4.89 billion, 3iQ with 1.66 billion, ETC issuance with $1.21 billion, and 21Shares with $1.11 billion.

The recently launched Purpose Bitcoin fund, on the other hand, was found to be in the sixth position with $517 million in AUM according to CoinShares.

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Digital Asset Fund Inflows Hit $4.2B In Q1; reports CoinShares 14

The inflows of the first quarter of 2021 surpassed the previous record of $3.9 billion that was seen in the fourth quarter of 2020.

CoinShares’ analysis also revealed that market participants continued to opt for investment providers that simply track the price of cryptocurrency assets over those that have active management strategies. These are known as passive funds. This sector has amassed an AUM of a whopping $54.1 billion, as opposed to $786 million for those with active strategies.

Miller Value Fund Files With SEC To Buy Bitcoin Via GBTC Trust Fund

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Bitcoin’s adoption is rising and several new institutions are jumping the bandwagon to reap profits out of the world’s flagship cryptocurrency. BTC Trusts have become wildly popular as it paved the way to ride the growth of the crypto markets by gaining indirect exposure to the crypto-asset.

In the latest development, the asset management fund, Miller Value Fund is all set to enter the cryptocurrency realm.

According to reports, Bill Miller’s investment trust has filed with the US Securities and Exchange Commission [SEC] seeking investment exposure to BTC indirectly by investing in the Grayscale Bitcoin Trust.

The company’s official filing, which was released this week, entailed extensive discussions on the cryptocurrency and also stated that their ‘Opportunity Trust Fund’ is getting into BTC.

The edit explained

“The Fund may seek investment exposure to BTC indirectly by investing in the Grayscale Bitcoin Trust, an entity that holds BTC. Grayscale Bitcoin Trust is a privately offered investment vehicle, the shares of which are also available over-the-counter. BTC is a digital commodity that is not issued by a government, bank, or central organization.”

The official filing also disclosed that the firm is looking for a 15% exposure via the GBTC trust fund and would stop purchasing once the said cap is reached. Noting the same, Ben Miller’s Trust further detailed,

“BTC has no physical existence beyond the record of transactions on the Blockchain. The Grayscale Bitcoin Trust invests principally in bitcoin. The Fund will not make any additional investments in the Grayscale Bitcoin Trust if, as a result of the investment, its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment.”

A quick primer: The Miller Value Partners has $3.5 billion in assets under management [AUM] is essentially operated by Bill Miller, a veteran investor and asset manager.

Miller has been a BTC investor for quite some time now. The news came hours before he penned down a letter touting the premier cryptocurrency as a growing investment. However, the latest announcement will be the company’s first tryst at managing a BTC portfolio for a publically traded fund.

Grayscale Creates New Record While Its Litecoin product Secures Third-Spot

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Litecoin [LTC] has seen some handsome gains over the past several weeks. Thanks to the continued bullish momentum, the cryptocurrency has now climbed to be the third-largest spot with respect to crypto holding by Grayscale Investments, which happens to be the world’s leading crypto asset management.

Grayscale Litecoin Trust’s  [LTCN] AUM was found to be at $74.8 million trailing behind Grayscale Bitcoin Trust [GBTC] at $10,821 million and Grayscale Ethereum Trust [ETHE] at $1,722 million. As LTCN steadily increased, it surpassed Grayscale Ethereum Classic Trust [ETCG] to secure the third position.

Litecoin Demonstrates Bullish Momentum As It Breaks Several Barriers

First launched in March, Grayscale Litecoin Trust became publicly available in August of this year. Prior to this only accredited investors were able to participate in it. Thanks to the price appreciation of the underlying cryptocurrency, LTCE scored massive investments’ inflow in the third quarter of the year, 1,800% to be specific.

This news comes a month after reports of Grayscale’s Litecoin Trust attracting massive capital inflows emerged. As noted above, the reason for this could be attributed to the positive price action of LTC/USD.  Litecoin has been on a bullish spree along with Bitcoin [BTC] and its peer altcoins this season. It surged all the way to the fifth spot on the cryptocurrency ladder blasting past Bitcoin Cash [BCH] as well Chainlink [LINK].

At the time of writing, LTC was being traded at $81.33.

Reportedly, Grayscale’s Litecoin Trust was found to be trading with a significant premium to spot prices. To top that, LTCN Premium recently scaled above 2300%. This level was recorded as the highest among the Grayscale products.

This positive momentum essentially indicated that market participants, investors, hedge funds, were eyeing to increase their LTC exposure.

Record For Grayscale

With this, Grayscale Investments has become the fastest growing asset manager. It has crossed a whopping $13 billion in assets under management [AUM] on the 15th of December. It has managed to add $1 billion worth of inflows in less than a month, benefiting from the revival of the cryptocurrency industry.

The platform had earlier reported that it had $12.1 million in AUM just a couple of days ago.

Barry Silbert, the CEO of Grayscale’s parent company Digital Currency Group, tweeted,

“Record AUM for Grayscale…$13 billion. Grayscale AUM on Nov 1: $7.6 billion Grayscale AUM today: $13.0 billion”

Grayscale Report Shows Evidence That Investors Were Regaining Trust in Crypto Market; GBTC Holdings Surge

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The cryptocurrency market’s resurgence over the past few weeks has kick-started significant asset movements on major exchanges. As the world comes to terms with dealing with life in quarantine, the market fluctuations represent the growing investor’s interest across the board.

Grayscale Investments, one of the largest and most popular cryptocurrency investment companies recently announced that over the past few weeks, the amount of holdings had increased steadily.  A calculation by the company showed that the total Assets Under Management had increased to a whopping $6.1 billion. 

According to Grayscale, a majority of the investments had flow into the Grayscale Bitcoin Trust. Bitcoin’s bullish performance over the past few had instilled confidence among its holders, who have brought into the market once again. The Bitcoin aspect of the trust amounted to $5037 million with a 3.2 percent increase on the daily. . The market price per share was calculated to be $14.75 percent while the holdings per share came to $11.6.

After Bitcoin, Bitcoin Cash held the major Grayscale repository with a $30.7 million hold in the trust. The BCH holdings per share were $2.94 percent with a 6.91 percent change every day. Bitcoin Cash’s volatility was one of the largest when compared to Bitcoin and Ethereum. Ethereum made up the the podium in Grayscale’s investment fund. The world’s largest altcoin had a total holding of $876. 6 million with a daily change of $1.61 percent. Ethereum’s market share held a healthy $83.9, which was the largest among its compatriots.

Grayscale’s Litecoin holdings were lesser than that of Ethereum Classic’s, Ethereum’s hard fork that has surprisingly made a positive impact in some areas. ETCG had a holdings per-share value of $6.64 while the daily change was 6.58 percent. At the same time, Litecoin’s Grayscale AUM amounted to $19.8 million at a daily rate change of 13.91 percent.

The Trusts by Grayscale are open-ended and sponsored by the company. Their main intention is to enable exposure to the price of movement of each trust’s underlying assets. This process avoids the challenges of storing, buying and safekeeping any of the aforementioned digital assets.

Grayscale Bought 50% of Ethereum Minted in 2020 as ETH 2.0 Testnet Garners Positive Response

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Ethereum is currently witnessing one of its most engaging periods in the industry. During the month of March, the coin suffered a major setback but the largest altcoin asset was able to rally back into a strong position.

Now, according to recent reports, Grayscale, one of the largest digital asset manager firm in the industry, is identifying Ethereum’s potential in space, regardless of its recent price scare. A recent Reddit post indicated that Grayscale’s investments had bought close to 50 percent of the Ether mined in 2020. The statistics indicate that the company currently holds 1.1% of the total Eth in the circulating supply.

Grayscale buying Ethereum left and right

According to data, a total of 1,563,245,875 ETHs were mined in 2020 from 1 January to 24 April. During the same period, it was observed that the number of shares issued to the Grayscale Investments Ethereum Trust (ETHE) was 13,255,400 on 24 April. The number was approximately 5,230,200 on 31 December.

On calculating the data, it was analyzed that approximately 756,240 ETH was bought which precisely meant ETHE bought around 49% of the total ETH mined.

Additionally, During the first quarter of 2020, Ethereum Trust accounted for a  $110M of inflows, which is more than all previous inflows combined for the past two years ($95.8M). That is a substantial increase, which suggested that the interest in ETH futures is likely more than what the community expected.

ETHE

Grayscale Ethereum Trust shares are some of the first securities solely invested in and derived from the valuation of Ethereum. The Trust allows its investors to gain exposure and experience with ETH’s price movements through a traditional investment vehicle. Traders and Investors are able to incur the profitability of trading without the challenges of buying, storing, and housing their ETH funds.

At the time of writing, Grayscale currently operated 10 different cryptocurrency investment products focused on institutional investors.

Ethereum 2.0 is gaining attention?

Previously, it was reported that the number of Ethereum validators was also on the rise following the launch of the recent ETH 2.0 testnet. The upcoming release of Ethereum 2.0, which will complete the migration from the current proof-of-work consensus algorithm to the proof-of-stake algorithm. It could be one of the main reasons behind the high level of buying at the current moment.

At press time, Ethereum’s valuation remained under the $200 range at $195 but it could soon breach above the $200 once again. Its market capitalization remained under $22 billion with a trading volume of $18 billion over the past day.