January 21, 2021

Cryptheory

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Grayscale lost nearly $4 billion in AUM as Bitcoin plummeted

2 min read

TL;DR Breakdown:

  • Grayscale assets valuation shrunk by almost $4 billion as cryptos dropped in price.
  • This was mostly caused by Bitcoin’s drop to $30,000 within two days.

Since January 10, Bitcoin (BTC) especially and other major cryptocurrencies, have been bleeding in price through January 11. The global cryptocurrency market took a heavy hit as the price of Bitcoin dropped from over $40,000 to around $30,000. Other large-cap cryptocurrencies like Ether (ETH), Ripple (XRP), and Litecoin (LTC) also began a heavy correction not seen since the rally in December. 

Consequently, the entire crypto market capitalization dropped below $1 trillion. The crypto derivatives market wasn’t even in good shape, either. Today, the largest crypto investment company, Grayscale Investment, posted its net asset under management (AUM), showing a massive drop in its entire cryptocurrency holdings.

Grayscale AUM drops to $24 billion

According to the update, Grayscale’s crypto holdings currently summed to $24.5 billion. This asset valuation is significantly dominated by its Bitcoin Trust or GBTC, worth about $20.6 billion. Other crypto products on the list include Ethereum ($3.1 billion), Bitcoin Cash ($119 million), Elhereum Classic ($101 million), Litecoin ($150 million), Ripple ($10 million), and others. The Grayscale Large Cap Fund valuation now sits around $303 million. 

Grayscale lost nearly $4 billion in AUM as Bitcoin plummeted 1

Although the record today could still be seen as a huge valuation, it’s, in fact, lower than the previous valuation reported on January 8. At the time, the investment company had a net AUM valuation of $28.4 billion. This represents about a $3.9 billion drop in Grayscale’s AUM when compared to the present record.

Grayscale lost nearly $4 billion in AUM as Bitcoin plummeted 2

Bitcoin update

As earlier mentioned, Grayscale’s assets valuation is mostly dominated by the Bitcoin product. So, the massive drop in the company’s holdings was caused by Bitcoin’s two-day major correction. However, the cryptocurrency is gradually making a comeback to $40,000. At the time of writing, Bitcoin trades at $35,563 on Coinmarketcap. Additionally, the market capitalization of BTC has risen from $603 billion yesterday to $$661 billion. 







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