Over the years, it has become abundantly clear that the flow of institutional capital is going to change the face of the cryptocurrency sector. A vehicle that has become increasingly influential in the world of cryptos is the Grayscale Bitcoin Trust (OTCMKTS:GBTC), and on Wednesday, its shares jumped by as much as 14% following the rally in Bitcoin.
Bitcoin Soars above $9K Mark
The world’s biggest cryptocurrency is going to have its ‘halvening’ event soon, and that could be one of the reasons behind the fresh rally. The event will cut the rewards for miners to half, and in the process, it is expected to slow down the fresh supply of Bitcoin tokens.
The regulation in supply is expected to control the supply of new Bitcoin tokens and consequently prop up the price. In the past, Bitcoin halvening events have resulted in significant spikes in the price of the cryptocurrency.
This is particularly important considering the fact that central banks across the world have boosted fiat money supply at an unprecedented rate, and some of its might flow to Bitcoin. Halvening events had taken place in 2012 and 2016, and on both those occasions, the price of Bitcoin rose sharply.
That being said, the rise in the price of the share price is a welcome relief for Grayscale Investment Trust. Despite the choppy waters in the crypto space over the course of the past months, Grayscale has managed to attract record flow of capital during the first quarter of 2020. Over the course of the past 12 months, as much as $1 billion was invested through Grayscale.
Around $503 million of that was invested in the first quarter of the year. This is a significant development, considering the fact that the meltdown in the traditional markets has hit many funds quite hard. For instance, BlackRock reported that many investors withdrew their money from the company’s funds in the previous quarter, and it was the first such instance in five years.