Introduction:
Are institutions looking to start gaining exposure to the crypto markets again? In this article we will explore 2 trusts/funds that offer ways for institutions to gain access to the crypto space in a regulated manor that look interesting, and could be pointing at institutional appetite….
Coinshares Fund:
Since 2014, CoinShares has provided solutions that connect crypto-assets with conventional financial markets. They claim to offer:
“Gain exposure to multiple cryptocurrencies through CoinShares’ 100% physically backed ETPs.”
In there update on the 2nd of October 2023, we saw inflows of $21 million for the first time in a while, they go onto say in the article:
- “Digital asset investment products saw inflows last week for the first time in 6 weeks totalling US$21m.”
- “We believe the inflows are a reaction to a combination of positive price momentum, fears over US government debt prices and the recent quagmire over government funding.”
- “Solana continues to shine, with inflows of US$5m, marking its 27th week of inflows and just 4 weeks of outflows this year.”
Coinshares Today released another update on the fund, reporting “largest inflows since July, totalling US$78m” They go onto say:
- Digital asset investment products saw inflows for the second week totalling US$78m, while trading volumes for ETPs also rose by 37% to US$1.13bn for the week.
- The Ethereum futures ETF launches in the US attracted just under US$10m in the first week, highlighting tepid appetite.
- Solana saw its largest week of inflows of US$24m since March 2022, continuing to assert itself as the altcoin of choice.
Coinshares is likely a product that is used by institutional players to gain access to the crypto space through a regulated product, right no with the current regulatory landscape most companies would fall into a grey area getting involved in the crypto space Coinshares offer a regulatory approved way of doing this avoiding any regulatory backlash for institutions, retail investors are far more likely to buy spot crypto as they are not under the same scrutiny and why would they buy a product when they can buy the underlying asset. For me ‘the writer’ this represents a institutional appetite for crypto being shown…
Greyscales Trusts:
Greyscale offer a variety of crypto based and backed products for institutional investor and normal investors alike..
These product are shares and trade like shares even though they are backed by underlying crypto that the shares represent, the price of the ETP (exchanged traded product) fluctuates and is not pegged to the underlying asset. right now GBTC’s price trades at around a 18% discount of the underlying bitcoin the share represents,
However their chainlink $LINK trust $GLNK is currently trading at a premium along with many of their other altcoin trusts and look to be getting big bids recently… So there is clearly buying of these trusts taking place, but by who?? who is most likely to use greyscales trust to buy crypto…. institutions who cannot go to the spot market… (my take)
Greyscales GLNK Chainlink $LINK Trust:
Their Stellar lumens $XLM product GXLM:
BCHG Greyscales Bitcoin Cash Trust:
Conclusion:
Both these products are typically used by a more institutional in nature buyer and not retail mainly, here at allincrypto we think that a crypto spring is upon us and its encouraging to see inflows from Coinshares fund pickup and dominate outflows, also we are seeing some promising signs in the greyscale products as some turn positive and start to trade at a premium which potential bottoming technical structure in place.
