Clearly, JP Morgan is eyeing more and more Bitcoin (BTC). Gone are the days when the biggest US bank threatened to fire its “stupid employees” who dared to get them. Wall Street juggernaut now notes that Bitcoin cuts gold dealers
Grayscale Bitcoin Trust is a “kind of ETF” to invest in Bitcoin (BTC). With the equivalent of 7.64 billion in Bitcoin, the fund is the largest holder of Bitcoin in the world. According to bitcointreasuries.org, the firm now holds 481,711 BTC in reserve. That is 2.29% of all Bitcoin owned by companies like MicroStrategy or Square. This also represents and 84% of ETFs.
The Grayscale fund weighs in total over $ 9 billion. It is invested in Bitcoin but also in Ethereum (ETH), Zcash (ZEC), Bitcoin Cash (BCH) and others :
As a reminder, ETFs (Exchange Traded Funds) are financial products intended to faithfully replicate changes in an asset like gold, a stock market share etc, both upward and downward. There are two kinds of ETFs.
- The “Good” ETFs called “physical” because the fund managing the ETF really holds the underlying asset. A company offering a physical gold ETF will therefore have a safe with gold bars. Or a wallet containing Bitcoins in the case of GrayScale.
- The “Bad” ETF called “synthetic” because the fund does not really hold the underlying asset. The fund artificially replicates variations in the underlying via derivative products (Futures, swaps, etc.). What is riskier in the event of financial berezina …
JP Morgan notes that October investment flows show a clear preference for the Grayscale ETF rather than gold-backed ones.
“This contrast supports the idea that some investors like super-wealth managers, who previously put their money in ETFs, may be turning to Bitcoin as an alternative to gold. “
This new appetite is hardly surprising given that GrayScale’s ETF outperformed 97% of US ETFs in September …The fund has attracted more than $ 1 billion in the third quarter of 2020. And more than $ 3 billion since the start of the year.
The Grayscale Ethereum Trust has also performed well this year, but we can bet that the increase in Bitcoin’s dominance will push the firm to increase the share of Bitcoin in its portfolio.
Bitcoin dominance is again above 64%. Even 81% if you exclude Stablecoins. Indeed, the latter are in no way cryptocurrencies stricto sensu (no blockchain …).
Those who prefer Altcoins would do well to follow Grayscale on Twitter. The fund regularly publishes the amounts of such or such cryptocurrency in their bag ($ BTC $ BCH $ ETH $ ETC $ ZEN $ LTC $ XLM $ XRP $ ZEC).
Monetary hegemony is always a fight to the death. And while there will always be room for several cryptocurrencies, including the very interesting Zcash (Edward Snowden’s favorite cryptocurrency), Bitcoin remains the chosen one.
And since more and more investors now prefer it to gold, remember that Bitcoin will be worth 40 times more the day it matches gold … Visit this article reporting that JP Morgan sees the value of Bitcoin be multiplied by 10 …