Grayscale Investments

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Grayscale Investments
Grayscale logo.png
Founded 2013
Headquarters New York, New York
Key People Barry Silbert, founder & CEO
Employees 2-10
Products Bitcoin investment trust
Twitter @grayscaleinvest
LinkedIn Profile
Facebook grayscaleinvestments
Website GBTC Home
Releases Company News


Grayscale Investments is a company that manages cryptocurrency investment funds. It is a subsidiary of the Digital Currency Group, which also owns the cryptocurrency news and digital media company Coindesk.[1]

History

Grayscale Investments was created in 2013 by the Digital Currency Group.[2]

In March 2017, Grayscale was managing $208 million worth of investments in the Grayscale Bitcoin Investment Trust. By March 2018, the company had created investment trusts for Ethereum, Litecoin, XRP Bitcoin Cash, and Zcash, and was managing more than $2.1 billion in cryptocurrency investment trusts.[3][4] The company launched an investment trust for Zen, a privacy-focused digital currency similar to Zcash, in June 2018.[5] The following month, it launched an investment trust for Ethereum Classic.[6]

According to Grayscale, 56 percent of the money it raised in the first half of 2018 came from institutional investors, 20 percent from accredited individual investors, 16 percent from retirement investors, and 8 percent from family investments.[7]

Bitcoin price plummets

By October 2018, the price of shares for the Grayscale Bitcoin Investment Trust (GBTC) had gone down 80 percent. Investors cited bitcoin's huge price decrease since December 2017, as well as GBTC's high fees, as the cause. (GBTC charges investors $20 for every $1000 invested, or 2 percent. Some consider this to be too high; according to the Investment Company Institute, the average equity mutual fund expense ratio was around 0.59 percent in 2017).[8][9]

Products and Services

Grayscale Investments manages a number of investment trusts, which it refers to as private "investment vehicles," for large amounts of bitcoin, Bitcoin Cash, Ether, Ethereum Classic, Litecoin, XRP, Zcash, and Zen. These trusts, or "vehicles" are passive investment funds, which track the prices of each digital asset in real time using digital trade algorithms. GBTC specifies on its website that only "accredited investors as defined under Regulation D of the Securities Act of 1933" are permitted to invest in any of their investment vehicles.[10] In January 2019, Grayscale Investments announced that it would be adding support for Stellar through the "Stellar Lumens Trust," an investment product.[11]

In May 2019, FINRA approved Grayscale's proposal to publicly list shares for an Ethereum-based trust, making it the first publicly-quoted security tied to Ethereum. Grayscale planned on launching trading for shares of the trust under the ticker ETHE sometime in early June 2019.[12]

Key People

  • Barry Silbert - Founder & CEO
  • Michael Sonnenshein - Managing Director

References