In brief

  • Three Arrows Capital has significantly increased its Grayscale Bitcoin Trust holdings.
  • The fund now owns nearly 38.9M shares, representing more than $1.31 billion in value.
  • Grayscale now manages $20 billion in total assets, a 10x increase from the start of 2020.

Singapore-based investment fund Three Arrows Capital has reported a significantly increased position in Grayscale Investments’ Grayscale Bitcoin Trust (GBTC), and now holds 38,888,888 shares. As of this writing, that position is valued at just over $1.31 billion.

This is a significant jump from the firm’s previously-reported GBTC holdings, which sat at just over 21 million shares as of June 2020. Three Arrows’ holdings represent a position of approximately 36,969 BTC, and nearly 6.1% of the trust’s 638,906,600 total issued shares to date.

"We continue to enjoy working with the Grayscale team and look forward to investing more in the crypto ecosystem," said Three Arrows Capital co-founder Kyle Davies, in a statement to The Block.

The value of assets under Grayscale’s command has skyrocketed alongside the price of Bitcoin and other cryptocurrencies, with the firm reporting a year-ending total of more than $20 billion in assets under management as of December 31. That’s a more than 10 times increase from the start of 2020.

Grayscale offers a way for institutional investors to gain exposure to Bitcoin and other crypto assets via its various funds, which are fully regulated with the United States Securities and Exchange Commission and publicly traded. According to a Grayscale report last year, 84% of GBTC buyers are institutional investors, with accredited individuals making up just 12% of the total.

Major GBTC investors come from both inside and outside of the crypto space. Crypto lending firm BlockFi owned 5.07% of all issued GBTC shares as of last month. ARK Invest, a $4.5 billion investment fund, owned more than 8 million GBTC shares as of last month, while $5.4 billion asset manager Horizon Kinetic owned more than 5.1 million shares.

Grayscale uses investors’ fiat money to purchase large amounts of cryptocurrency, and then lists those funds on the stock market, tracking the price of cryptocurrency for each respective fund. The shares trade at a premium, however, due in part to the firm’s management fees.

The Grayscale Bitcoin Trust represents the vast majority of Grayscale’s assets under management, amounting to just under $17.48 billion as of December 31. The next-highest fund, the Grayscale Ethereum Trust, landed at nearly $2.176 billion. Shares closed the day on December 31 at $32.00 apiece and shot up as high as $36.60 today, although they sit at $33.80 apiece as of this writing.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.