Grayscale sees slowing capital inflow in Q4 2018, firm suggests drop due to ‘seasonal challenges’

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New York-based Grayscale, a subsidiary of Digital Currency Group, raised $30.1 million in the last three months of 2018; a third of the record $95.4 million raised in the same period last year.
 
Managing Director Michael Sonnenshein told The Block he was not surprised that Q4 was a “little bit slower” than the $81.1 million in inflows in the third quarter, and suggested the drop was due to “seasonal challenges.” The final quarter, which began in October, coincided with the dramatic fall in bitcoin’s price. 
 
Still, he remains positive given their full-year inflows stand at $359.5 million following a successful start to 2018 – the strongest calendar year since the business began in 2013. More than 50 percent came from institutional investors, based primarily in the U.S., while retirees made up another significant portion.
 
“Bitcoin specifically is where the majority of inflows are going,” Sonnenshein said, adding that investors’ overwhelming interest in Grayscale’s passive Bitcoin Investment Fund rather than its altcoins products may be because “that’s where investors have spent the most time, hence they’re most comfortable with that asset.” He added another possible explanation was because the coin has “overcome so much adversity.” 
 
The firm has shown continued faith in the coin too, with parent company CEO Barry Silbert just yesterday saying “bitcoin is king”. 
 
The world’s largest digital currency investment firm now has $825 million in assets under management, primarily in its Bitcoin-based passive investment fund, falling below its previous billion-dollar mark.
 
Asked how he manages a business with rapidly shrinking assets, Sonnenshein said they were focusing on managing the expense side of the business. “We are growing our team, and investing in tech and infrastructure,” he added, pointing specifically to the changes made to streamline the investor onboarding process.
 
“The main takeaway [from these results] is that people are not less interested in cryptocurrency,” he concluded. “We saw clients already involved in digital assets continue to deploy capital.”

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Grayscale sees slowing capital inflow in Q4 2018, firm suggests drop due to ‘seasonal challenges’ written by Isabel Woodford @ https://www.theblockcrypto.com/2019/02/14/grayscale-sees-slowing-capital-inflow-in-q4-2018-firm-suggests-drop-due-to-seasonal-challenges/ February 14, 2019 Isabel Woodford

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