Bitcoin Treasuries

[fillippone]

A nice report for Bitcoin funds.
Those are not properly "Bitcoin Treasuries", but Microstrategy  is mentioned.

2020 Q2 Crypto Fund Report

Purpose
Crypto Fund Research's quarterly crypto fund reports provide a snapshot of the industry at quarter's end, as well as a detailed look at industry trends across time. We hope the quantitative data and related insights provided by these reports play a positive role in continuing to improve the crypto fund industry's transparency and provide useful metrics for crypto funds and other participants to benchmark their growth, operations, and best-practices.

In the interest of providing the broadest possible coverage, the report covers crypto hedge funds, venture funds, hybrid funds, private equity funds, fund of funds, and passive funds. Where not otherwise noted, the term "crypto fund" is used in a manner inclusive of this wide variety of fund types.


Introduction

There are now more than 800 crypto funds across the globe with primary offices in more than 80 countries. While new crypto funds continued to launch in Q3, 2020, the pace of new launches has slowed throughout 2020, particularly when compared with 2017 and 2018.



Q3 2020 was another strong quarter for crypto funds. The CFR Crypto Fund Index increased 23.6% while Bitcoin increased 18%. This is somewhat unusual in that crypto funds tend to underperform Bitcoin in periods in which Bitcoin appreciates significantly.


In the News

The Bad

• Microstrategy announced it made a second round of BTC purchases bringing their total holdings to over $400 million
• Neural Capital was among several crypto funds to close its fund in Q3

The Good

• Grayscale announced its funds grew by over $1 billion in just two weeks
• Fidelity filed for a new Bitcoin Fund, the Wise Origin Bitcoin Index Fund
• Pantera Capital closed its latest crypto fund with $165 million

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[1715200799]

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[CarnagexD]

This will hasten the adoption process of bitcijn especiy when these big of a company are the ones who are open in saying that bitcoin is the future. However, I am quite in doubt that they are saving bitcoins for that sole purpose only. These corporations may be hiding something from us that we do not know of yet. This ckuld either make or break bitcoin's future,and being the public, we can only afford to watch.

[JayJuanGee]

This will hasten the adoption process of bitcijn especiy when these big of a company are the ones who are open in saying that bitcoin is the future. However, I am quite in doubt that they are saving bitcoins for that sole purpose only. These corporations may be hiding something from us that we do not know of yet. This ckuld either make or break bitcoin's future,and being the public, we can only afford to watch.

If you are a small potato "public" person, then you should be buying bitcoin, instead of just watching.  Sure, some institutions might try to play with their coins to sell high and to buy lower, and some will make money in the process and some will end up getting fucked because they tried to play with or manipulate something that they did not understand.  We have already seen a lot of these kinds of dynamics, and the overall game does not change that much merely because BIGGER players are getting in, but BIGGER players getting into bitcoin puts buying pressure (and price pressure) on bitcoin rather than logically causing you to become too scared to dip your toes in because you believe that some of them might dump... blah blah blah.  They might, and they might not.    Don't get stuck without any coins... and failing to meaningfully and adequately prepare yourself for UP.

[KnightElite]

This will hasten the adoption process of bitcijn especiy when these big of a company are the ones who are open in saying that bitcoin is the future. However, I am quite in doubt that they are saving bitcoins for that sole purpose only. These corporations may be hiding something from us that we do not know of yet. This ckuld either make or break bitcoin's future,and being the public, we can only afford to watch.

If you are a small potato "public" person, then you should be buying bitcoin, instead of just watching.  Sure, some institutions might try to play with their coins to sell high and to buy lower, and some will make money in the process and some will end up getting fucked because they tried to play with or manipulate something that they did not understand.  We have already seen a lot of these kinds of dynamics, and the overall game does not change that much merely because BIGGER players are getting in, but BIGGER players getting into bitcoin puts buying pressure (and price pressure) on bitcoin rather than logically causing you to become too scared to dip your toes in because you believe that some of them might dump... blah blah blah.  They might, and they might not.    Don't get stuck without any coins... and failing to meaningfully and adequately prepare yourself for UP.

Sadly to say that a lot of people are keep wasting the opportunities in the market where they prefer to watch than to take any action, for sure that there are a lot of companies and institution who also keep acquiring bitcoin especially today where it is now nearing at its all time high which almost $20k. These companies and institutions have the best analyst for sure and they able to understand that the all time high breakout is the strongest breakout that may happen, it is funny that a lot of people are now scared especially the small players out there where they think that the price is now expensive and overbought. Actually the momentum signal like RSI is having different purpose and uses whenever the prices are having strong momentum.

[JayJuanGee]

This will hasten the adoption process of bitcijn especiy when these big of a company are the ones who are open in saying that bitcoin is the future. However, I am quite in doubt that they are saving bitcoins for that sole purpose only. These corporations may be hiding something from us that we do not know of yet. This ckuld either make or break bitcoin's future,and being the public, we can only afford to watch.

If you are a small potato "public" person, then you should be buying bitcoin, instead of just watching.  Sure, some institutions might try to play with their coins to sell high and to buy lower, and some will make money in the process and some will end up getting fucked because they tried to play with or manipulate something that they did not understand.  We have already seen a lot of these kinds of dynamics, and the overall game does not change that much merely because BIGGER players are getting in, but BIGGER players getting into bitcoin puts buying pressure (and price pressure) on bitcoin rather than logically causing you to become too scared to dip your toes in because you believe that some of them might dump... blah blah blah.  They might, and they might not.    Don't get stuck without any coins... and failing to meaningfully and adequately prepare yourself for UP.

Sadly to say that a lot of people are keep wasting the opportunities in the market where they prefer to watch than to take any action, for sure that there are a lot of companies and institution who also keep acquiring bitcoin especially today where it is now nearing at its all time high which almost $20k.

I am like a broken record in that regard.  I always tell people to start buying right away no matter what the price is, and of course, if you dollar cost average in, then you can still hold back some cash too in order to attempt to buy on dips, as well.. that is if there are dips.

So, sure, the companies buying, even at these seemingly higher prices, seems to be reflected partly in Michael Saylor's comments that it might well be taking some of them some time to really get on board and to be gearing up.

Not saying that we are not going to have some significant price dips along the way, but we are getting BIGGER player buyers that should be sending signals of a need to get in and to prepare for possible UP rather than just sitting on the sidelines and acting like bitcoin might not be "the right" investment for you....

In that regard, bitcoin has been one of the best investments, yet for retail.... Holy fucking shit.  Bitcoin has been one of the first investments that we regular peeps have been able to front run institutions and BIGGER players.  Sure some of them are coming in, but little guys still have time to get some kind of reasonable stake in BTC before more and more of the BIG players get in.. NOTHING really stopping regular normies from getting in, except for fear and failure/refusal to act.. and such fear and hesitations in acting are going to be their greatest enemies when it comes to 5 to 10 years down the road when they are likely going to have trouble buying even close to as many BTC as they can get now... Normies might be able to get 1-10BTC without any major troubles, but in 5 to 10 years, they might have trouble even getting a whole bitcoin.. absent having a pretty large amount of money (which kind of takes them out of the normies category).

These companies and institutions have the best analyst for sure and they able to understand that the all time high breakout is the strongest breakout that may happen, it is funny that a lot of people are now scared especially the small players out there where they think that the price is now expensive and overbought. Actually the momentum signal like RSI is having different purpose and uses whenever the prices are having strong momentum.

Sounds like you have the right mindset KnightElite, and hopefully you have been stacking sats over the last few years, and either you reached your sat stacking goal or you continue to stack even if you have a decent stash of sats already.  Going to be an interesting year to come and maybe even an interesting couple of years from here on out to continue to hear about more companies getting in and also just more normies getting in, too.... we will see?  We will see?.....

[fillippone]

There is not only Grayscale and the BTPE Funds: also the Canadian fund from 3iq is doing well:

MILESTONE:
@3iq_corp
's The Bitcoin Fund (TSX:QBTC) surpassed 13,771 BUM: #Bitcoin Under Management

We prefer to use BTC as a unit of account

https://twitter.com/3iq_corp/status/1331012161972310016?s=20

Please note the reference to BTC as unit of account!


So they are getting bigger:



Definitely noticeable in the bigger scheme of things: another frantic Monday-to-Friday buyer of BTC,

[fillippone]

Are Governments the next  Category in Bitcoin Treasuries?

We know that US Government already owns large chunks of coins:

US Seized More Than $1B in Silk Road–Linked Bitcoins, Seeks Forfeiture

The U.S. is suing for the forfeiture of thousands of bitcoins, totaling more than $1 billion, that it recently seized, the Department of Justice said Thursday.

• The seizure on Tuesday, tied to early darknet market Silk Road, is the largest the U.S. has ever conducted, the DOJ said.
• Court documents reveal the seized funds include over 69,370 bitcoin and nearly equivalent amounts of forked cryptos bitcoin cash (BCH), bitcoin gold (BTG) and bitcoin satoshi vision (BSV).

We know that US Government is used to sell those coins trough a US Marshall Auction


But apparently, They're not alone: Chinese example is following their example.


Chinese police have seized $4.2 billion cryptos from PlusToken Ponzi crackdown

• A Chinese court has detailed for the first time the breakdown of all the crypto assets seized by police during the PlusToken Ponzi scheme crackdown
• The seized assets are worth more than $4.2 billion at today’s prices
• The court said the seized cryptos “will be processed pursuant to laws” and “forfeited to the national treasury.”

This is a combined amount of more than 264,000 BTC, or 1.25% the total Bitcoin Supply.

[The Sceptical Chymist]

There is not only Grayscale and the BTPE Funds: also the Canadian fund from 3iq is doing well:
<snip>
Please note the reference to BTC as unit of account!

Holy shit!  This seriously makes me wonder if these corporations know something bad is around the corner--like hyperinflation, perhaps? 

It's unimaginable to me that publicly-traded companies would be snapping up all the bitcoin they can buy for their treasuries or whatever else, even in a bitcoin bull market.  It's extremely risky either way, and I get the feeling that these companies see owning bitcoin as a less risky alternative to the dollar or whatever fiat currency they normally kept in reserve.  That's actually kind of frightening if you think about it, but I hope I'm wrong and these corporations are just bullish on bitcoin.

[Karartma1]

There is not only Grayscale and the BTPE Funds: also the Canadian fund from 3iq is doing well:
<snip>
Please note the reference to BTC as unit of account!

Holy shit!  This seriously makes me wonder if these corporations know something bad is around the corner--like hyperinflation, perhaps? 

It's unimaginable to me that publicly-traded companies would be snapping up all the bitcoin they can buy for their treasuries or whatever else, even in a bitcoin bull market.  It's extremely risky either way, and I get the feeling that these companies see owning bitcoin as a less risky alternative to the dollar or whatever fiat currency they normally kept in reserve.  That's actually kind of frightening if you think about it, but I hope I'm wrong and these corporations are just bullish on bitcoin.

Do you really think these supermassive fiat money conglomerates are really worried if buying $500, $1000 or $5000 more per coin? I don't think so. They are setting their agenda out in plain sight and it is like a hug f*** you to those asset and wealth management firms which kept saying bitcoin was a joke for the last 5 years.
MSTR showed us they basically moved on their own getting their btc on Coinbase (jeez, coinbase!).
Of course, it's frightening to think how these entities are moving the market but that is unavoidable now. Bitcoin has no owners and we can all be owners. Don't play with the sharks 

[lixer]

It is both a bit about crypto but a bit about regular world finances as well. In the regular world finances we get to see stocks and other stuff crash once every decade or so, we also see that they are not going to be able to live like this forever because the idea is screwed up and it is not sustainable unless governments keep printing money all the time, what they could potentially do is move away from something that is not sustainable and move into something that would help everyone.

Now that means they are moving away from traditional markets, which has nothing to do with crypto, but the part that impacts crypto is that when they are moving away, they picked crypto as the place they move to, which is the reason why we see these high prices even with a fall.

[fillippone]

Another day, another institutional buying:

MassMutual Joins the Bitcoin Club With $100 Million Purchase

Massachusetts Mutual Life Insurance Co. bought $100 million of bitcoin for its general investment account, the latest sign of mainstream acceptance for the upstart digital currency.

The investment is a tiny one for the Springfield, Mass.-based insurance company whose general investment account totaled nearly $235 billion as of Sept. 30.

If a 170 years old institution buys 0.04% of his assets in Bitcoin I can’t see how any other institutional cannot have 2% of their total asset on Bitcoin.

[jaysabi]

Another day, another institutional buying:

MassMutual Joins the Bitcoin Club With $100 Million Purchase

Massachusetts Mutual Life Insurance Co. bought $100 million of bitcoin for its general investment account, the latest sign of mainstream acceptance for the upstart digital currency.

The investment is a tiny one for the Springfield, Mass.-based insurance company whose general investment account totaled nearly $235 billion as of Sept. 30.

If a 170 years old institution buys 0.04% of his assets in Bitcoin I can’t see how any other institutional cannot have 2% of their total asset on Bitcoin.

Lol, easily, because just because a small minority of people are doing something doesn't mean that everyone else should also go do what they're doing, especially when it involves specialized knowledge, which I would consider bitcoin to require.  Most successful businesses are successful because they stick to what they know, and it's not reasonable to expect other people to go out and gain specialized knowledge just because some people are making money with it, especially when it's not germane to what they do naturally. For example, my neighbor has made a very significant amount of money buying and trading baseball cards and has a collection that is a significant portion of his net worth, but that doesn't mean that everyone else on my block is eager or even thinks it's a good idea to go out and start buying a ton of baseball cards.  None of us have the knowledge for doing that successfully and we'd lose a lot of money if we tried.

[JayJuanGee]

Another day, another institutional buying:

MassMutual Joins the Bitcoin Club With $100 Million Purchase

Massachusetts Mutual Life Insurance Co. bought $100 million of bitcoin for its general investment account, the latest sign of mainstream acceptance for the upstart digital currency.

The investment is a tiny one for the Springfield, Mass.-based insurance company whose general investment account totaled nearly $235 billion as of Sept. 30.

If a 170 years old institution buys 0.04% of his assets in Bitcoin I can’t see how any other institutional cannot have 2% of their total asset on Bitcoin.

Lol, easily, because just because a small minority of people are doing something doesn't mean that everyone else should also go do what they're doing, especially when it involves specialized knowledge, which I would consider bitcoin to require.  

Maybe it is a bit "specialized" to appreciate the concept of scarcity, and the concept of Gold 2.0... And surely, there can be learning and attempts to learn along the way too...  Investors do not need to know all aspects of bitcoin in order to be able to put 1% to 10 % of their investment capital into it (or some other amount that is comfortable to them) just as a 16 year old girl does not need to know anything about mechanics (or even what makes the car go) in order to be able to drive a car and even become a kind of high talented driver.. similar with computer operations.. don't even need to know how the computer works, but if I hit these keys it types, and when I press on these buttons it takes me to google in which I can find out anything that I want, and I have hardly any clues about how all of that happened.

Most successful businesses are successful because they stick to what they know, and it's not reasonable to expect other people to go out and gain specialized knowledge just because some people are making money with it, especially when it's not germane to what they do naturally.

Yeah.. work that "specialized knowledge" angle.. until it starts to sound a bit forced.

For example, my neighbor has made a very significant amount of money buying and trading baseball cards and has a collection that is a significant portion of his net worth, but that doesn't mean that everyone else on my block is eager or even thinks it's a good idea to go out and start buying a ton of baseball cards.  None of us have the knowledge for doing that successfully and we'd lose a lot of money if we tried.

Surely bitcoin is not baseball cards, and there is quite a bit more information out there about bitcoins various general propositions, especially compared to the amount of information that was available 12 years ago.  So, yeah, putting 1% to 10% of investments assets into bitcoin might require more knowledge the higher proportion that is invested and even the longer that a person is invested... but should not stop anyone from getting started.. even though lots of peeps do 1) fail refuse to get started, 2) fail to familiarize themselves with bitcoin and 3) even sometimes learn about bitcoin and then still fail to take any actions.  So the more common sets of problems likely would not be so much in acting, but instead failing/refusing to act.   

[TheGreatPython]

Wait a minute, are we sure about the grayscale number? If I am not reading it wrong, it says nearly 10 billion dollars and it says over 500k bitcoins, are we sure about that?

I mean there is already just around 10 million bitcoins available in the market, if they bought 5% of that in under one year, that is both awesome for them but also quite scary for us because if grayscale which is smaller compared to other huge wall street companies can do this, that means JP Morgan or similar level places could come in and buy like 100 billion dollars worth of bitcoin easily, hell do like a 1 trillion version and buy nearly half of it. I rather not see that happening at all.

I hope 500k+ is not the right number and there is something wrong with that number, maybe 10% of that so we can feel at ease.

[acquafredda]

Wait a minute, are we sure about the grayscale number? If I am not reading it wrong, it says nearly 10 billion dollars and it says over 500k bitcoins, are we sure about that?

I mean there is already just around 10 million bitcoins available in the market, if they bought 5% of that in under one year, that is both awesome for them but also quite scary for us because if grayscale which is smaller compared to other huge wall street companies can do this, that means JP Morgan or similar level places could come in and buy like 100 billion dollars worth of bitcoin easily, hell do like a 1 trillion version and buy nearly half of it. I rather not see that happening at all.

I hope 500k+ is not the right number and there is something wrong with that number, maybe 10% of that so we can feel at ease.

What is scaring you off? Bitcoin is out there for everybody and I believe that is the beauty of it. GBTC is hoarding an enormous amount of coins and can be considered an institutional early adopter. We are entering into very scary waters so hold your keys and secure your BTC because these sharks will come after us.
Just remember: the more they buy, the higher the price. Bitcoin fixed supply will fix this.

[exstasie]

Bitcoin is a strategic investment, not a means of speculation.

I disagree. Just because one believes Bitcoin's monetary policy is a potential answer to inflation doesn't make it not speculative.

People like Michael Saylor are clearly betting that BTC prices are headed higher. That's the whole point of piling in so much cash over such a short period of time. I happen to agree with him regarding Bitcoin's long term trajectory but honestly, we're both just speculating about things like future adoption (whether institutional, retail, government, or all of the above) and future money printing. Those things aren't guaranteed.

Wait a minute, are we sure about the grayscale number? If I am not reading it wrong, it says nearly 10 billion dollars and it says over 500k bitcoins, are we sure about that?

I mean there is already just around 10 million bitcoins available in the market, if they bought 5% of that in under one year, that is both awesome for them but also quite scary for us because if grayscale which is smaller compared to other huge wall street companies can do this, that means JP Morgan or similar level places could come in and buy like 100 billion dollars worth of bitcoin easily, hell do like a 1 trillion version and buy nearly half of it. I rather not see that happening at all.

Grayscale's trust has been building in size since 2013. Back in the fall of 2014 they held ~100K BTC. In the spring of 2015 they held ~135K. And so on. So it was not an overnight process.

Check out the GBTC observer thread for historical data: https://bitcointalk.org/index.php?topic=337486.0

[fillippone]

Wait a minute, are we sure about the grayscale number? If I am not reading it wrong, it says nearly 10 billion dollars and it says over 500k bitcoins, are we sure about that?

I mean there is already just around 10 million bitcoins available in the market, if they bought 5% of that in under one year, that is both awesome for them but also quite scary for us because if grayscale which is smaller compared to other huge wall street companies can do this, that means JP Morgan or similar level places could come in and buy like 100 billion dollars worth of bitcoin easily, hell do like a 1 trillion version and buy nearly half of it. I rather not see that happening at all.

Well, first of all there are more than 10 millions Bitcoin out there, we are a little bit more than  18,500,000 millions actually, so the 560,000 bitcoin held at Grayscale represent a little bit more than the 3%.

Secondly yes it wasn’t an overnight process, and if you want to know more about how they got so big, you could check the spreadsheet attached to my thread

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

There are many graphs about Grayscale and of course one of them is about the NAV build up:

Check out the GBTC observer thread for historical data: https://bitcointalk.org/index.php?topic=337486.0

Thanks!
I didn’t know that thread!

[magneto]

This may be asked before, but what advantages exactly does buying equities of holding companies that have a portion of their NAV in BTC or crypto derivatives have over just holding it in a hardware wallet yourself?

Is it some sort of tax incentive that I'm currently unaware of?

Obviously for the founders themselves, forming a corporation provides a limited liability clause in everything which allows them to separate their individual wealth from their potentially leveraged BTC positions - but I'm asking a very specific case here for the individual, retail investor that has a choice between pure crypto or crypto equities/ETF-like vehicles.

[JayJuanGee]

This may be asked before, but what advantages exactly does buying equities of holding companies that have a portion of their NAV in BTC or crypto derivatives have over just holding it in a hardware wallet yourself?

Is it some sort of tax incentive that I'm currently unaware of?

Obviously for the founders themselves, forming a corporation provides a limited liability clause in everything which allows them to separate their individual wealth from their potentially leveraged BTC positions - but I'm asking a very specific case here for the individual, retail investor that has a choice between pure crypto or crypto equities/ETF-like vehicles.

Seems to me that there is no advantage to investing indirectly into these funds, yet the reason that people do it will likely be that certain kinds of money that they have cannot be invested directly into bitcoin.  They need to have an authorized vehicle to get the bitcoin exposure through those funds - which would be through a company that has exposure or through some vehicle that is recognized as "acceptable."  A similar thing may well be true of financial consultants, they might be limited by their institutions in what they can invest in - including that their organization structures around fees that they can collect through such investment vehicles, even if the fees are small or close to zero.

Of course, some people get nervous owning something directly, so they like having those middle man holders/managers of their assets.

[exstasie]

I disagree. Just because one believes Bitcoin's monetary policy is a potential answer to inflation doesn't make it not speculative.

This thesis is not based on the idea that Bitcoin is a potential answer. It is based on a comparison between 2017 and 2020. In 2017, the growth of bitcoin was due to retail buyers who wanted to get rich faster, they took out loans, mortgaged property and bought bitcoin with all the proceeds. Their goal was to make a profit faster.

In 2020, the price is driven by institutions that see bitcoin as a hedge against potential macroeconomic risks and a rescue from inflation and money depreciation due to the policies of states that continue or will continue to print money amid the ongoing pandemic until GDP and jobs recover.

First, I wouldn't attribute everything to institutional interest. Second, none of that makes investing in Bitcoin not speculative. It's becoming less speculative and risky over time. That, I can concede.

Now Microstrategy is going into debt to buy more BTC, for amounts that represent a very large chunk of their net assets. And no doubt we'll see plenty of even more risky behavior from institutions at higher valuations. Then the real fun will begin!

One only needs to look to 2007-2008 for inspiration regarding how reckless institutional investors can be.