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By "buying from the market" I assume you mean on exchanges? Why would big buyers want to do that?

It would be great for us BTC holders if they market bought $700 million on Coinbase, but it would also make it much more expensive for them to accumulate their coins!

Big buyers want the price to go up after they accumulate, not during.

These big companies getting involved with nearly a billion dollars total are actually setting an example for the other huge ones as well and that is what matters to us right now. Grayscale is just a milestone, this one did this huge bet and if they lose a lot of money jp morgan will probably think they shouldn't, but if they make a ton of money jp morgan will say maybe they should get in.

These are the type of stuff that I really care about, if there is tens of billions of dollars going into bitcoin soon in the near future looking at these examples, that means this is a great example for future. Even if they end up losing though (which they won't) in the long run bitcoin will continue to rise, even if it falls time to time it will make a profit which is why I think big companies will get in sooner or later.

The Grayscale is all about those projects which come in hot like hell-boy and vanish like melting ice-cream. Yeah I like to think that way about it. If you study the whole project's trading parameters then it's but obvious that they are turning into playground of bullish and bearish trading. Also I feel that they are since biggest project out of no-where (somehow) which works on the Market Price Vs. Enterprises holding price, it could be manipulated very easily.

If they are putting huge investment into it then it could random plot or very thoughtful plot to change the BTC scale and help their investors to grow meanwhile. I don't know but this is what it is.

I agree that OTC could be the way to go but if you are really buying that much, wouldn't buying from the market make it better? I mean think about it, the price is 10k and you want to buy 700 million dollars worth of bitcoin, shouldn't that mean you would increase the market a ton?

People would see that you are buying from one exchange and they will want to buy/sell in order to do arbitrage to make money thanks to you, but the best case would be price going up no matter what since not that many people have 700 million dollars and not that quickly, worst case would be price still standing still, grayscale is not losing anything at all. I would say OTC is the "safe" method and they probably did that obviously, but market buying would have made it a lot more volatile and increase the price as well.

They are usually buying OTC at the same price from richer people and bitcoin whales, they do not buy all at once from just one place but they find people with tens of thousands of bitcoins who do not want to disturb the market by selling it all and they do not want to disturb the market by buying it all on the market neither so they get together and make the deal on paper face to face to make it more legit and deal is done OTC which doesn't change the prices in the market directly, maybe the news of it could change something.

So, there is no need to question if they actually bought it or not, they totally did because they declared it to SEC and you can't do that without actually buying and just trick SEC into thinking that is where the money went while spending it somewhere else.

Seeing this thread bumped reminded to me to check on the GBTC premium over spot.

My theory is that all this buying by Grayscale is an arbitrage play. Institutional investors are buying in private placement at NAV, then hedging their position, pocketing the difference.

In February, the GBTC premium over spot was ~30%. In August, it was 15%. Now it's only ~8.4%!

So all this Grayscale news isn't bullish in and of itself. Investors are just buying from one hand and selling to the other.

I actually view it as bearish for Grayscale. GBTC's first mover advantage is weakening as alternative regulated options for Bitcoin exposure emerge. Their management fee and premium over spot just aren't worth paying anymore.

Grayscale ceo is the famous one that said he lost a lot of money and not got fired, so it makes sense someone like him would be the first one to get into bitcoin with such a huge amount, it is not really that shocking that they were the first ones, but in reality I believe other places still has some time before they could profit, we are still not that ahead in the constitutional money right now.

I understand that grayscale was the first one to get in and they will probably make a ton of money and they will make the customers happy but we are about 3-5 years away from all of wall street having one crypto desk or even a group, it will eventually happen because that is the nature of the business, flow with where money goes but that moment is not right now and not because of grayscale.

Hello, good finding. I already made my own version here:

Bitcoin Treasuries


I supplemented the information on the website with a few additions.

The open source website for Bitcoin Treasuries in Publicly Traded Companies is a cool supplementary ingredient for your topic.

Its github: https://github.com/nvk/bitcointreasuries.org

In my thread Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! I analysed that buy with the enclosed spreadsheet.
It is quite actually to spot that buys from Greyscale.
They actually closed the primary market after those buys. Quite strange.

Anyway the important thing to remember is that those coins will be locked for six months and so those will be available to sell on the last days of March next year!

Also another fun fact is that you probably don’t realise how big Grayscale is until you compute their daily fee: more than 24 BTC. Every given day, for no risk.

I didn't consider it from the perspective of miners. It is really shocking that grayscale all by itself can absorb all the miners all by themselves. Every single miner in the world could sell all their coins and just grayscale would be able to not only buy their coins, but also buy more to increase the price as well. It is really a very very important part of crypto world right now.

The moment grayscale decides that they are not willing to buy more, will be a very sad moment for bitcoin as a whole, I would prefer that they would continue their purchasing constantly, in order to keep the bullish run going on. I know they can't handle it all by themselves but they are creating a huge help for every bull minded person out there, they are creating a big base to work from.

I like the fact that lots of institutional investors are becoming interested in Bitcoin, and I’m happy about that because it means that more money will be going into Bitcoin steadily and it become more recognized and will become a normal investment where big investors will investing regularly.

Although in some way I am worried about it, I’m always thinking in my mind if these people are going to be holding these huge amounts of BTC forever, which of course is not possible, and another question is what’s going to happen when they eventually sell their BTC that they are holding? The market is going to crash heavily. But whatever, before then things are going to be a little different.

There is no evidence they are buying from miners. And there is no reason to. Also, given the involved amounts, my nee cannot even provide a big enough flow of bitcoins.
They are buying from HODLers, willing to play the easy, ta free game of  “arbitrage” between NAV and share price.
Of course they are buying OTC, to protect their buying from order slippage. I think of course they would use the same methodology in the case of a sell, even if you are right in case of a large selloff there might be a difficulty finding enough buyers!

That was my first thought after reading the OP.  It wasn't "Wow!  Look how much bitcoin this asset management firm is buying!", it was "Just wait until there's a panic and everyone wants to dump their bitcoin all at once". 

If that were to happen, I'm not sure how Grayscale would handle the sell order requests.  I would hope that they wouldn't just dump a large number of bitcoin onto the market all at once, and I'd also hope that they employ some kind of hedging strategy to protect their customers from bitcoin's notorious market volatility. 

Another post said they were buying it directly from miners, which would be off-exchange, and that's smart.  I don't know much about Grayscale, but on the surface from what I've read here it seems like they know what they're doing.

I tried to match these computation in my Gray Scale thread. I obtained similar, not identical results. Conclusions are still valid in my opinion!
I am going to doublecheck computations in the next few days.

They said they are buying directly from the miners. But given their bitcoin stash, how much is the final number here? We don't know the truth about these numbers unless they will disclose those btc addresses involved. I believe they also sold some of them but we don't know how much.

This is Im thinking too. If those amount and figure indeed bought bitcoin there should be a massive pumped as the volume of bitcoin will be drag up. Seems like grayscale bought on another way or via otc on some popular platform.

Grayscale seems to expand their wings on the crypto community. Good if they are holding massive amount of bitcoin for operation purposes.

This isn't the first time they've bought Bitcoin either right? So this tells me every time they buy, they've just been using profits or new capital, so they and their clients have been doing nothing but holding except for all those ads they bought (which must be quite expensive on its own). Now if they believe in it all they must be knowing something else we probably all don't:)

He did not want to say that Bitcoin is a negligible currency. Many of us consider Bitcoin to be the basis of this market and call Bitcoin digital gold. However, it is foolish to deny the fact that investments in the crypto market and Bitcoin by large investment funds are very small, especially when compared with the stock market.

It was over 800 million dollars in a quarter, now it is almost 700 million in just 3 months, that is really not that bad at all all things considered in the market. Obviously no matter how much grayscale ends up buying, it will never be enough because they probably do end up selling some as well but more importantly all by themselves they are not going to make too much noise, the better option would be for them to actually end up having competition.

If there are 10 or more companies like grayscale that means we could potentially have 6.9 billion instead of 690 million, that would help us out a lot.

This is good comparison but it doesn't prove that bitcoin is negligible currency. Lets not forget that crypto currency and specifically BTC landed in our hands just a decade ago. In that also half of the world did not believe in it for the first 2-3 years. Considering its gradual incrimination in the parts it has achieved trillion dollar industry already.

This is the case where we are comparing hundreds of years old monetary system with the new born baby!

For example, it is the same case as today's $5 were close to $500 bucks in 18's etc.

It's tiny fish for now, it wouldn't be same forever. 

That's what I wanted to say. Of course, we should be happy about such news. However, the volume of investment is still very, very small.


They could have bought Bitcoins on the OTC market. This is usually done by large buyers. This method of purchase does not directly affect the price of Bitcoin. On the contrary, the price may fall, because the one who sold such a large amount of Bitcoins will manipulate the market to buy back the previously sold amount of Bitcoins cheaper.
Perhaps this is the reason why we are now seeing a slight drop in the price of Bitcoin.

I would fully support any request for more transparency and accountability from custodial organizations. But is there any route with which institutional investors can evade the technicalities and get Bitcoin directly, without having to go through Grayscale and the likes?

Looking at this list that claims to expose the top holders of Bitcoin through Grayscale, it is dominated by various Trust, advisory and management firms, I would assume for them to aquire and hold Bitcoin directly, there would be lots of hurdles buying/selling on an exchange, as well as the legalities of storing it as a bankable asset.

Probably part of the reason that Grayscale is incentivized to be less than transparent is in order that they can work some good deals behind the scenes, and surely it is difficult to know (without being an actual insider with them) whether part of their tactic to get good deals behind the scenes is to attempt to play around with the price with their own holdings... Do they do that at all, and if they do, it probably would be a bit of an addictive drug to see that they would be capable in a decent number of circumstances of using a large number of coins to move the market, if they were to chose to attempt to accomplish such.

Of course such numbers published are a good advertising for what they do and I hope that some of the bigger investors do ask for a proof of such claims from Grayscale. Else everything is a (bad) joke.
I'm curious how tough they played on the market to buy at a good price (how much did they also sell!)   
All in all, if everything is nice and fair, it's quite an advertising also for Bitcoin.


PS. In the same way we had rumors in the past about MtGox money being prepared to be sold, I expect "Graycale is preparing to sell" rumors will be used in the (not too far) future to shake the weak hands.

I am not really clear the extent to which these various companies are required to be transparent with their BTC holdings, and of course, if they are registered or licensed in various jurisdictions, then they may have certain kinds of anti-fraud requirements, and I am NOT completely confident that various state actors are incentivized to require various BTC custodians to keep 100% reserves.

Of course, the BTC community would both prefer BTC custodians to keep 100% reserves and to have some kind of way to be audited in order to make sure that they are not engaging in fractional reserves (or rehypothication) practices.

Frequently, BTC custodians will have some amount of incentive to engage in fractional reserves, and even though BTC HODLers overall would like to make them hold 100% reserves, for quite some time, I have been suspecting that one of the governmental (and traditional financial institutional) attacks on bitcoin would be to allow these fucktwat custodians to engage in the same kinds of behaviors that traditional financial institutions have increasingly been able to get away with committing various kinds of frauds on the public - even recently, there has been additional loosening and even completely removing any kind of requirement whatsoever for banks to have to hold any kind of reserve before they can just create money out of thin air - so in that regard, I foresee that the main ways that BTC HODLers can fight these kinds of corrupt fractional reserve systems is to continue to require audits, transparency and even remove their coins out of those systems - which may well cause those large non transparent custodian systems to have a lesser value for their BTC than those BTC that are directly held - and sure, what I am saying seems to be a kind of pie in the sky thinking, but one of the powers of bitcoin remains the ability to directly take possession on very short notice - but another part would be to denigrate custodians and to discourage people from using them much if at all unless they are actually engaging in a certain amount of transparency in terms of their holdings - some kinds of credible and real time audits - which surely are possible systems to set up within BTC (programable money).

From what I heard, this has done very little to move the price upward so far because they mostly buy Bitcoin OTC directly from miners and not from spot exchanges. Probably too much slippage for them on spot trading for those amounts.

Oh, so basically they are just looking for HODLers then buy for them to somehow evade fees yet offer HODLers an additional amount for their BTC? Well then, if they hold huge amount of BTC, what purpose would they be having with the amount they hold? We all know that it is a risk once a huge percentage of Bitcoin is being held by a single company, they can control the price and dump it or just simply make multiple sell orders at a lower price in which many would buy and break the BTC or even all crypto market.

How could they not have public address btw?

I think I answered a lot of those answer on my t he was here:

Everything you wanted to know about Grayscale BTC Trust but were afraid to ask!

When you read “GBTC bought xxx bitcoin” you have to consider two things:

• Of course they are not buying coins from miners, so checking this amount versus newly minted coins is appalling, but ultimately näive. They are buying in the vast inverse of HODLers.
• When you read “buying”, you have to actually think “added to their AUM” as there are two main ways to add BTC to GBTC: give them USD, so that they actually buy BTC, of acquire GBTC shares “in kind” giving them actual BTC. This is by far the most interesting statistic in their report, and make you understand how much this instrument is actually playing with whale money.

I am going to update my thread with this reference and I will try to crunch some number in the accompanying
spreadsheet.
Last, no, contrary to the BTCE ETP there is no public address to check. You have to trust their numbers.

I am glad that institutional investors are gradually increasing their investment in the crypto market. However, I can't call this a serious investment. The largest investment funds have monetary volumes in the trillions of dollars (for example, Freddie Mac, Fannie Mae, Morgan Stanley). They can afford to invest much more in the crypto market, but they are not doing so yet.
Let's hope that over time they will stop considering cryptocurrencies as high-risk assets and the volume of their investments will increase significantly.

That's quite a huge number.
What I am curious here is how we can know if those numbers are legit or after they buying such Bitcoin, do they not selling it after some move of the price?
I am also curious about what happened if Grayscale will dump those Bitcoin in the future?

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