How did Grayscale get so much Bitcoin?

[digifinex.official]

"Grayscale’s Bitcoin Trust now holds more than 500,000 Bitcoin, surpassing $8.3 billion in value."

https://cointelegraph.com/news/grayscale-now-has-half-a-million-bitcoin

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[franky1]

greyscale own:
blockstream (the bitcoin dev group)

they also own all of these bitcoin exchanges and digital currency services
https://dcg.co/portfolio/

its more then likely 50% of all bitcoin in the last 4 years that have entered an exchange have touched the hands of greyscale

[mk4]

Grayscale is a fund, and people invest in them to get exposure to bitcoin. It's not like they literally own the 500,000 bitcoin, the coins are just in their custody for their investors. Pretty much for those people who want to take advantage of bitcoin's price rise but isn't willing to learn how to secure their funds and such.

[bitmover]

Grayscale is a fund, and people invest in them to get exposure to bitcoin. It's not like they literally own the 500,000 bitcoin, the coins are just in their custody for their investors.

Exactly what I was going to say. People talk too much about Grayscale, but they are just a custodial service.

Just like Binance, Coinbase, etc.

Pretty much for those people who want to take advantage of bitcoin's price rise but isn't willing to learn how to secure their funds and such.

Not just that.
There are some institutional investors, pension funds, etc can't buy bitcoin directly due to regulations and legislation. But some of those funds are able to buy a Bitcoin Future, or even a Grayscale share.

So, it is not solely for small investors who don't want to hold bitcoins. I believe most of their clients are institutional

[tranthidung]

The date is outdated but with it you can see the total amount of bitcoin is hold on Grayscale accounts for ~ 22% of daily trading volume (on that day ~ 2 054 390 but last 24h trading volume is 1 989 670). It is not changing much but you can do your own updated calculations with my methodology here

Sources:

• Bitcoin Treasuries discussion
• https://bitcointreasuries.org/

As @bitmover and @mk4 discussed, neither Grayscale nor their investors dump all their bitcoin within a day.

[bitmover]

The date is outdated but with it you can see the total amount of bitcoin is hold on Grayscale accounts for ~ 22% of daily trading volume (on that day ~ 2 054 390 but last 24h trading volume is 1 989 670). It is not changing much but you can do your own updated calculations with my methodology here

Why not add binance coinbase bitfinex and other big custodial services? I would like to know how big step they compared to grayscale

[drlukacs]

"Grayscale’s Bitcoin Trust now holds more than 500,000 Bitcoin, surpassing $8.3 billion in value."

https://cointelegraph.com/news/grayscale-now-has-half-a-million-bitcoin

In fact it is not exactly the total amount of money that Grayscale Company fully owns. they have hedge funds and the majority of Bitcoins come from their customers.
Grayscale can be called one of the most powerful technology investment funds right now, they can manipulate the Crypto market at any time with a fortune of over $ 8.3 billion
Hopefully Grayscale will not disappoint us, they should be legit investment funds and should not use their large amount of money to control the Crypto market.

[Leviathan.007]

As far as I know Grayscale is not a self-service company and they won't get the bitcoins by themselves. Grayscale is somewhere that people invest and deposit their bitcoins. Just like the exchanges such as Binance and Coinbase or any other exchange. Also, the bitcoin development group named blockstream is owned by them, in the other hand by owning many other exchanges it's completely possible to see the grayscale is rising so much. And surly, rising the grayscale one reason of why bitcoin price is rising so much.

[bitmover]

. Grayscale is somewhere that people invest and deposit their bitcoins. Just like the exchanges such as Binance and Coinbase or any other exchange.

Not exactly.  There is no way to deposit bitcoin in grayscale fund.
You buy a share of the fund, which contains bitcoins. There is no way to withdrawal bitcoins also, because you dont own bitcoins but a share of the fund

[sheenshane]

I tend to agree above with my post.

Grayscale is indeed the most trusted custodial service and they act like a bank for Bitcoin holders regardless of whether you are a small or huge investor like whales.  The important thing here is they never break the trust that was given to them by their investors. However greyscale are a custodial service to most of them then they could take control over the trading market as a big whale if they intend to.

I can't imagine they hold 500,000 BTC Worth $8.5 Billion Currently Owned By Grayscale

[DapanasFruit]

greyscale own:
blockstream (the bitcoin dev group)

they also own all of these bitcoin exchanges and digital currency services
https://dcg.co/portfolio/

its more then likely 50% of all bitcoin in the last 4 years that have entered an exchange have touched the hands of greyscale

Well, no wonder why Greyscale is a big influencer in the world of Bitcoin and cryptocurrency. And I guess they are here for the long haul, celebrating the taste of success as BTC is right now on the rampage.

[figmentofmyass]

Why not add binance coinbase bitfinex and other big custodial services? I would like to know how big step they compared to grayscale

coinbase's bitcoin holdings are roughly double the size of grayscale's. these stats from ~ a month ago shed some light on the current spot exchange situation: https://cointelegraph.com/news/five-mega-exchanges-hold-10-of-bitcoin-s-entire-supply

Likely owing to its custody services, Coinbase holds by far the most, with 944,904 BTC currently spread across approximately 4.39 million different wallet addresses.

Huobi ranks second with 323,665 BTC held in roughly 901,600 unique wallets, followed by Binance with 289,961 BTC across nearly 2.7 million addresses. OKEx has 276,184 BTC in 339,000 wallets, while Kraken holds 126,510 Bitcoin among 672,000 addresses.

The next seven exchanges — Bitflyer, BIttrex, Bitfinex, Poloniex, Coincheck, Gate.io, and Bitstamp — hold a further 210,000 Bitcoins between them.

[AjithBtc]

Grayscale is a fund, and people invest in them to get exposure to bitcoin. It's not like they literally own the 500,000 bitcoin, the coins are just in their custody for their investors. Pretty much for those people who want to take advantage of bitcoin's price rise but isn't willing to learn how to secure their funds and such.

This means same as having our holdings left on the exchange wallets for the purpose of trading. This means Grayscale take responsibility of user funds, providing security and supervision and not the trust of profit. This means these funds can also be used by Grayscale for profit making and there is no need of providing dividend to the users.

[mk4]

This means these funds can also be used by Grayscale for profit making and there is no need of providing dividend to the users.

Technically they could, but since when did bitcoin provide dividends though? You're not investing in Grayscale, you're investing in bitcoin through Grayscale. There's a significant difference.

[Subbir]

In fact, a cryptocurrency like Bitcoin may be a currency whose origin and transactions happen entirely through the internet and isn't limited to any particular country. This virtual currency launched within the digital world round the world. the rationale why Grayscale got such a lot bitcoin is because it made a profit also invested when prices were low which is why Bitcoin got such a lot thanks to price increases. Through the analysis of technology everything are often further advanced in terms of technology.

[odolvlobo]

I feel like nobody has correctly or sufficiently explained what Grayscale is and what it does. Here is my explanation:

What is the Grayscale Bitcoin Trust?
The Grayscale Bitcoin Trust is basically an ETF. It's sole function is to own bitcoins. It does not have any income and it doesn't make a profit. It just owns bitcoins. It is not a custodian. It doesn't hold bitcoins for you in an account.

As an ETF, it has shareholders. Each shareholder owns a proportional share of the assets of the ETF (primarily bitcoins, of course). The shares of the trust can be bought and sold. There are currently 540,935,800 shares and the fund holds about 515,000 BTC, so each share is worth a little less than ¹/₁₀₀₀ BTC.

Where does the fund get its bitcoins?
The fund acquires bitcoins by giving accredited investors shares of the fund in exchange for bitcoins. So, for example, if you deposited 1 BTC into the fund today, you would receive about 1050 shares of GBTC. As a result, the total number of bitcoins held by the fund would go up by 1 and the total number of shares would go up by 1050.

Investors are willing to deposit their bitcoins into the fund because they can make an instant profit of about 15%. For example, 1 BTC is worth about $18k, but the 1050 shares of GBTC they would receive by depositing that 1 BTC are currently worth about $21k.

Restrictions
There are some restrictions.

• Anyone can buy and sell the shares on the open market, but you must be an accredited investor in order to receive shares by depositing bitcoins into the fund.
• An investor that deposits bitcoins and receives shares cannot sell those shares for 6 months.
• Shares currently cannot be redeemed for bitcoins.

Why would investors own GBTC when they could own BTC directly?

• GBTC can be held in a retirement account, which could mean that gains are not taxed. If you are expecting a 10x return on your bitcoins, you might consider holding GBTC in a Roth IRA instead.
• If you deposit bitcoins into the fund, the shares you receive are worth more than the bitcoins you deposited.
• You can make money by arbitrage from the difference between the value of the shares versus the value of the bitcoins they represent.
• Convenience.

[thesmallgod]

I think I read they are an investment company which means people invested their bitcoin with them. So does that translate to them owing that amount of bitcoin? it is like saying a particular bank has so much amount of money when all they have been doing is keeping so people money. If they hold such an amount of bitcoin then it means they must have somewhere the money they are pumping into bitcoin is coming from. The company has been trending recently because of the news

[Wind_FURY]

greyscale own:
blockstream (the bitcoin dev group)

they also own all of these bitcoin exchanges and digital currency services
https://dcg.co/portfolio/

its more then likely 50% of all bitcoin in the last 4 years that have entered an exchange have touched the hands of greyscale

They don't "own", but "partly own". They don't control those companies like how you're trying hard to misinform everyone that they're like the Bilderberg Group.

Grayscale also owns losers in that portfolio, like the shitcoins, Bcash, Zcash, Ethereum, and Ethereum Classic.

[Nalbo]

And Grayscale on the other hand is owned by a multiple of other funds. They are a joint project with shareholdings from different brokers, hedge funds, wealth management groups and other institutions. Those companies again are owned by different institutions and individuals. So, these funds are basically and indirect way for companies and individual to profit from bitcoin without handling them on their own.

[Anonylz]

Grayscale is a fund, and people invest in them to get exposure to bitcoin. It's not like they literally own the 500,000 bitcoin, the coins are just in their custody for their investors. Pretty much for those people who want to take advantage of bitcoin's price rise but isn't willing to learn how to secure their funds and such.

Is there a similarity between what greyscale is offering to their customers interms of btc services and that of PayPal! (Sorry I had to digress a little) because I see they are custodian of such huge amount of btc and yet people don't seem to criticise this action the way they lay it heavily on PayPal, or is it that some how the owners of this btc or investment have access to their private keys? Just wondering.