H1 2018 Highlights1
- Total Investment into Grayscale Products: $248.39 million
- Average Weekly Investment – All Products: $9.55 million
- Average Weekly Investment – Bitcoin Investment Trust: $6.04 million
- Average Weekly Investment – “Non-Bitcoin” Investment Products2: $3.52 million
- Majority of investment (56%) is coming from institutional investors.
Introduction
Grayscale Investments is a global leader in digital currency investing. We have brought single-asset and diversified investment products to market over the last five years, including the publicly quoted Bitcoin Investment Trust™ (OTCQX: GBTC) and Ethereum Classic Investment Trust™ (OTCQX: ETCG), as well as our flagship diversified offering, Digital Large Cap Fund™.
Through our experience working with prominent investors around the world, we have compiled a proprietary dataset of investment activity through our regular course of business. In this report we will outline some important trends we’ve seen in the digital asset market during the first half of 2018.
Two Sides to Every Story
As the investment community knows, over the last six months, the digital asset market experienced one of the largest price drawdowns since the inception of Bitcoin in 2009. However, what is more interesting, and somewhat counterintuitive, is that the pace of investment into Grayscale products has accelerated to a level that we have not seen before. In fact, we raised nearly $250 million in new assets in the first half of this year, marking the strongest inflows of any six month period in the history of our business.
Figure 1: Grayscale Cumulative Inflows by Investment Product
December 31, 2017 through June 30, 2018

Figure 2: Grayscale Investment Product Performance
Total Return (Cumulative %)

H1 2018 Performance

Investment Activity through the Grayscale Lens
Despite the recent price action, by taking the cumulative investment activity highlighted in Figure 1, and analyzing the week-over-week data, we can see that the inflows into Grayscale products are occurring at a healthy and consistent rate. For example, our average weekly asset raise across all products was $9.55 million and we’ve seen fresh inflows during each week of 2018.
Figure 3: Grayscale Weekly Inflows by Investment Product
December 31, 2017 through June 30, 2018

While the majority of assets are still flowing into Bitcoin Investment Trust…
Figure 4: Bitcoin Investment Trust Cumulative Inflows
December 31, 2017 through June 30, 2018

Investors have clearly begun diversifying into other digital assets as well.
Figure 5: Grayscale Non-Bitcoin Cumulative Inflows
December 31, 2017 through June 30, 2018

Bitcoin continues to be the most popular position for Grayscale investors, with 63% of inflows into Bitcoin Investment Trust and 37% into Grayscale products tied to other digital assets.
Figure 6: Investment Product Type as % of Total Assets Raised
December 31, 2017 through June 30, 2018

Investment into both our Bitcoin and non-Bitcoin products was strong and consistent, with an average weekly inflow of $6.04 million into Bitcoin Investment Trust and $3.52 million into non-Bitcoin products.
Figure 7: Bitcoin Investment Trust Weekly Inflows
December 31, 2017 through June 30, 2018

Figure 8: Grayscale Non-Bitcoin Weekly Inflows
December 31, 2017 through June 30, 2018

Our data provides evidence that investors appreciate the notion that multiple digital assets can survive, thrive, and complement one another in the new digital economy, allowing them to play a diversifying role within investor portfolios.
Investor Profile
Another revealing insight is the makeup of our investor base. Through our analysis, we determined that most asset inflows are coming from institutional investors. This segment comprises roughly 56% of all investment YTD, followed by accredited individuals (20%), retirement accounts (16%), and family offices (8%).
Figure 9: Grayscale Investor Profile by Type
December 31, 2017 through June 30, 2018

The average investment was $848K for institutional investors, $553K for family offices, $335K for retirement accounts, and $289K for individuals. It is important to note that this data is skewed by the fact that the investment amounts do not necessarily fall within a normal distribution. For example, there were some large, one-time outliers and investments that were broken up into multiple allocations over a series of days. Nonetheless, this should at least paint a general picture of the typical investment amounts we’re seeing from each client segment.
Moreover, if we break down our investor base by geography, roughly 64% of all new investments came from U.S. investors, 26% from offshore investors (e.g. Cayman-domiciled entities), and 10% from investors in other regions of the world.
Figure 10: Grayscale Investor Profile by Geography
December 31, 2017 through June 30, 2018

Conclusion
We’re excited to share this report for two major reasons:
- We believe it provides an alternate, yet accurate, firsthand perspective on digital asset market activity that is distinct from what is commonly understood.
- It may be useful to both value and momentum investors as they seek to identify investment opportunities where there are (i) dislocations between market prices and fundamentals and (ii) strong, steady capital inflows.
We intend to regularly update this report to identify trends in the digital asset investment landscape.