Grayscale reports record inflows to cryptocurrency funds in Q1 on the back of strong hedge fund allocations

Global digital currency asset manager Grayscale reported a record-setting USD503.7 million in inflows to its digital currency funds in Q1 2020, despite the economic shock of the coronavirus pandemic. 

This is nearly double the previous quarterly high of USD254.8 million set in Q3 2019. Over the last quarter, institutional investors represented 88 per cent of all inflows, the majority of which were from hedge funds.

The mandate and strategic focus of these funds is broadly mixed and includes Multi-Strategy, Global Macro, Arbitrage, Long/Short Equity, Event Driven, and Crypto-focused funds.

New investors accounted for USD160.1 million in inflows. Grayscale Bitcoin Trust and Grayscale Ethereum Trust both experienced record quarterly inflows of USD388.9 million and USD110.0 million, respectively.

For the first time, inflows into Grayscale products over a 12-month period crossed the USD1 billion threshold (USD1.07 billion), showing strong and sustained evidence that investors are increasing their digital asset exposure at current levels. Cumulative investment across the Grayscale family of products since inception has reached USD1.68 billion.

Approximately 38 per cent of investors now have allocations to multiple products within the Grayscale family, up from 29 per cent at the end of Q1 2019.