Bitcoin’s ‘sweet spot’ a major reason for investment uptrends, claims Grayscale’s latest research


The cryptocurrency market has been showing positive signals since the latest bull run lifted the price and market cap of Bitcoin and, in turn, rest of the coins. In a recent compilation of data by Grayscale, the Barry Silbert-led organization touched on the cryptocurrency investments and developments during the first quarter of 2019.

The organization stated that its total Assets under Management [AUM] was calculated to be $1.2 billion, just slightly more than Coinbase, which had crossed the $1 billion AUM mark last month. The organization claimed that there was a 42 percent upward trend in product inflows every quarter-over-quarter. The report added:

“Grayscale experienced a 42% uptick in product inflows quarter-over quarter, from $30.1 million in 4Q18 to $42.7 million in 1Q19. Notably, hedge funds ramped up their investments substantially, from less than $1 million in 4Q18 to approximately $24 million in 1Q19.”

Grayscale’s research further pointed to Bitcoin’s prominence in the investment domain, by analyzing the king coin’s new found “sweet spot”. According to the report, the cryptocurrency market was on the verge of adopting a new “risk-on” mentality where investors were taking the plunge into not just Bitcoin, but other digital assets as well.

Bitcoin’s uptrend was also catalyzed by the approaching third BTC “block reward halving” scheduled to take place in May 2020. According to the company’s release:

“Historically, block-reward halvings have helped drive above-average returns for Bitcoin in the years that follow. Some investors may be questioning if this event is fully priced into the market yet, and building long positions as a result.”

Taking the historical data of Bitcoin halvings into account, it was noted that after each halving the price of BTC appreciates. This was made evident from the previous examples at November 2012, November 2013, July 2016 and the latest halving that occurred in July 2017.

The latest research from Grayscale comes on the back of another report titled “Heading Global Liquidity Risk with Bitcoin” which compared the effects of global events on assets like Bitcoin. Grayscale opined that:

“… it [Bitcoin] has a distinct set of properties, unlike any other asset. Through this unique mix of properties, Bitcoin has the potential to perform well over the course of normal economic cycles as well as liquidity crises, especially those involving currency devaluations.”

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