Observation | Which mainstream companies are influencing the cryptocurrency market in 2020?

Despite the epidemic and halving, this year's crypto market still won at the end of the year. Bitcoin successfully set a record high, and Ethereum set off a DeFi craze and the development of 2.0 technology... Of course, friends who are familiar with the crypto market will not forget that the new bull created in 2020 is very different from the past. This is the year when institutional investors began to embrace cryptocurrencies, and it is also an important year for the majority of investors to participate in the market in compliance.

During this year, institutions have attracted global attention from quietly planning to aggressively "buying, buying, buying". According to Bankr.nl data, the world's top ten crypto companies hold 4% of the total Bitcoin, of which six are from the United States: Grayscale Bitcoin Trust, Block.one, MicroStrategy, Galaxy Digital Holdings, Stone Ridge Holdings Group and Square. In recent months, American investment companies and technology companies have gradually increased their holdings of Bitcoin. In 2020, American institutions have played a decisive role in the development of the Bitcoin market.

In addition, the layout of the crypto market by banks, insurance companies, payment companies, etc. and their optimism about Bitcoin provide an important foundation for ordinary people to participate in this market.

Grayscale: Buy, buy, buy

Grayscale Investment Trust was originally a Bitcoin investment fund under the private equity trading platform SecondMarket. In 2014, Barry Silbert, the founder of SecondMarket, separated the Bitcoin investment fund from the original company and established Grayscale Investments.

In 2015, Grayscale Investments was merged into the newly established Digital Currency Group (DCG). DCG not only focuses on digital currency and blockchain investment, but is also an incubator for start-ups. As the most important behind-the-scenes participant in the crypto world, DCG is not only the direct controller of Grayscale Trust, but also the parent company of Genesis, one of the largest cryptocurrency over-the-counter trading and lending platforms, the famous blockchain media Coindesk, the emerging mining service provider Foundry, and the exchange Luno. It has also directly invested in well-known crypto companies and institutions such as Bitpay, Circle, CoinList, Coinbase, Ledger, EtherScan, Paxos, Protocol labs, and Xapo.

For the crypto market in 2020, Grayscale's dazzling performance lies in its non-stop "buying, buying, buying". Grayscale's continuous increase in BTC holdings is considered one of the most important supporting forces for the rising market in the past few months.

According to the official Twitter account, as of December 22, the total size of Grayscale's asset management rose to $15.9 billion. The trading price of the Bitcoin Trust Fund (GBTC) was $30.39 per share; the trading price of the Ethereum Trust Fund (ETHE) was $23.4 per share.

It is worth noting that its total assets under management increased by US$2.5 billion in three days. On December 15, Grayscale's total assets under management were US$13 billion; as of December 18, this figure had risen to US$15.5 billion.

As part of DCG's investment, Coinbase, the largest cryptocurrency exchange in the United States, provides safe custody for Grayscale's digital assets. On December 18, taking advantage of the surge in Bitcoin, Coinbase announced on its official website that it had submitted a draft registration document S-1 to the U.S. Securities and Exchange Commission (SEC) in a confidential manner, formally applying for an IPO. If the IPO is successful, Coinbase will become the first major cryptocurrency exchange to be publicly listed.

With Grayscale as the vanguard, DCG can be regarded as one of the largest institutional forces driving the development of the 2020 market.

Block.one: EOS parent company holds 140,000 Bitcoins

Block.one is the parent company of EOS. As a blockchain software company, Block.one was established specifically for the development of EOS. However, the previous ICO of EOS made Block.one earn up to $4 billion. Most of this money was invested in US bonds, and the rest was used to purchase 140,000 bitcoins.

Of course, Block.one already held this amount of Bitcoin, and overall it cannot serve as a direct force driving the development of crypto in 2020.

MicroStrategy: Software company holds the most Bitcoin among listed companies

MicroStrategy is definitely a "money-eating beast" in the Bitcoin market. As a software company, MicroStrategy has become the listed company with the largest number and value of Bitcoin in the world. Its CEO has repeatedly been optimistic about Bitcoin in public and pointed out that Bitcoin is better than gold. I spent $600 million to buy Bitcoin, placing an order every 3 seconds for 14 days.

MicroStrategy's purchases began in August, when the company said it had purchased 21,454 bitcoins for $250 million and would use bitcoin as its primary reserve asset. MicroStrategy also said on December 7 that it plans to raise $400 million through convertible notes and use the net proceeds from the process to purchase bitcoin. The convertible priority notes will mature in 2025 and will be raised from qualified institutional buyers through a private placement. On December 9, MicroStrategy officially announced the details of the previous convertible note plan. Officials said that it will officially issue convertible notes worth $550 million and use the net proceeds from the issuance of the notes to purchase bitcoin.

Mobile payment giant Square: announced that it has invested $50 million in Bitcoin

The payments company, founded by Twitter co-founder Jack Dorsey, has long been bullish on Bitcoin.

In fact, Twitter and Square CEO Jack Dorsey has long been a Bitcoin advocate, saying in 2018 that he believes Bitcoin will eventually become the world's single currency within the next decade. Dorsey, who personally owns an undisclosed amount of Bitcoin, said in a 2018 earnings call: "For us, Bitcoin will not stop buying and selling. We do believe that this is a transformative technology for our industry, and we want to learn as quickly as possible."

Square has been selling Bitcoin to consumers since November 2017, after adding a “Buy” option to its Cash App. The service has grown rapidly, generating $125 million in Bitcoin revenue in the third quarter of 2019, double the revenue generated in the first quarter of 2019.

In addition, the financial report shows that Square processed $148 million in Bitcoin sales transactions in the third quarter of 2019. More and more users are turning to Square's cryptocurrency app: Cash, and using it as the preferred service for Bitcoin investment. In 2019, Square also launched Square Crypto to provide grants to Bitcoin developers and designers.

In October this year, Square even announced that it had purchased 4,709 BTC for $50 million. According to this calculation, the cost price of Bitcoin purchased by Square this year is around $10,600. After October, the price of Bitcoin has soared to more than $24,000. As a financial payment platform, Square's support and purchase of the crypto market is one of the important forces promoting the prosperity and development of the market.

Asset management company Stone Ridge Holdings: Purchased more than 10,000 Bitcoins worth approximately $114 million

Buying Bitcoin as an asset reserve seems to be a common choice for listed companies and mainstream asset management companies. After MicroStrategy, an asset management company listed on the Nasdaq, announced that it had purchased a total of $425 million in Bitcoin, making BTC the main holding type of its asset reserve strategy, Square, a mobile payment giant with a market value of $86.6 billion, announced on October 8 that it had invested $50 million in Bitcoin (BTC). Five days later, Stone Ridge Holdings, an asset management company that manages more than $10 billion in assets, revealed that as part of its asset reserve strategy, the company purchased more than 10,000 Bitcoins, worth about $114 million.

Although asset management firm Stone Ridge Holdings purchased Bitcoin after MicroStrategy, given Bitcoin's current price development, this does not prevent it from becoming a beneficiary of this round of crypto bull market.

Galaxy Digital Holdings: New cryptocurrency service for institutional investors buys $134 million worth of Bitcoin

Galaxy Digital Holdings is a US cryptocurrency commercial bank. Its main businesses include cryptocurrency trading, ICO investment, third-party asset management and consulting services. It is committed to providing full-service commercial banking services for the cryptocurrency and blockchain industries. Its founder is investment legend and former Goldman Sachs executive Michael Novogratz.

In 2019, Galaxy Digital Holding Ltd launched two new Bitcoin funds, mainly for qualified investors and institutional investors. These two funds joined many other new cryptocurrency services for institutional investors, laying the foundation for the prosperity of the crypto market.

Galaxy Digital Holdings also purchased $134 million worth of Bitcoin on June 30, 2020.

Cross-border payment platform Paypal: Allows users to buy, sell and hold cryptocurrencies on the platform

In a year that has seen increasing mainstream attention to bitcoin, perhaps the biggest surprise has been PayPal’s embrace of the cryptocurrency.

In October 2020, the payment giant announced support for users to buy BTC, ETH, LTC, and BCH. Unprecedented demand for the service led Paypal to increase withdrawal limits for all US customers before buying cryptocurrencies. PayPal CEO Dan Schulman later declared that he was "bullish on various digital currencies" Paypal said it would soon provide fiat currency buying and selling channels for cryptocurrencies.

PayPal itself has active users, and these users will become the main force of PayPal's online Bitcoin business, bringing a prosperous channel to the encryption market.

Visa: Supports USDC payments

Visa announced a surprising partnership with Circle to support USDC payments to 60 million merchants worldwide. The company will also issue a bank card specifically for sending and receiving USDC payments. USDC is an ERC-20 token designed to be pegged to the price of the US dollar.

In other words, Visa is slowly starting to adopt Ethereum, and it’s ready to help the world use it.

Singapore's DBS Bank: Announces that it will provide cryptocurrency trading

On October 27, DBS Bank, the largest commercial bank in Singapore, announced on its official website the launch of the digital trading platform DBSDigitalExchange, which will provide legal currency (SGD, HKD, JPY, USD) trading services for four digital currencies: BTC, BCH, ETH and XRP. But then, DBS Bank's official website removed the relevant information page about the digital trading platform. A DBS Bank spokesperson later said that the bank's digital currency trading platform plan is still under development and has not yet been approved by regulators. No further announcements will be made before approval.

On December 10, DBS Bank announced the official launch of the digital trading platform DBS Digital Exchange, which will start trading next week. Piyush Gupta, CEO of DBS Group, said that the platform will provide exchange services, spot trading services and custody services between four fiat currencies (Singapore dollars, US dollars, Hong Kong dollars, and Japanese yen) and four digital assets (BTC, ETH, BCH, and XRP).

Ruffer Investment Company Limited: Allocate Bitcoin to protect against the risk of fiat currency depreciation

Ruffer Investment Company Limited, an investment management company listed on the London Stock Exchange, announced its new Bitcoin allocation strategy in December this year.

The company is reported to have included Bitcoin in its Multi-Strategies fund, mainly as a defensive measure against the risk of "continued depreciation" of fiat currencies. The fund currently holds about 2.5% of its total assets in Bitcoin. Ruffer made this asset allocation in November last year after reducing his holdings of gold and switching to BTC.

Founded in 1994, Ruffer managed 20.3 billion euros ($27.2 billion) in assets as of Nov. 30. The firm has about 6,600 clients worldwide, including individuals, families, pension funds and charities.

The allocation of Bitcoin by listed asset management companies is promoting the mainstreaming of Bitcoin.

One River: Quietly holding more than $600 million in cryptocurrencies will hold more Bitcoin and Ethereum

One River, an asset management firm based in Greenwich, Connecticut, has become one of the largest investors in Bitcoin. The hedge fund, which focuses on betting on market volatility, has teamed up with Alan Howard, co-founder of Wall Street asset management firm Brevan Howard Asset Management, to quietly purchase more than $600 million in cryptocurrencies.

Eric Peters, CEO of One River Asset Management, claims that in addition to the $600 million in Bitcoin purchased this time, they will hold more Bitcoin and Ethereum next year, with a total investment of $1 billion. There is no doubt that as institutional investors become more interested in cryptocurrencies, One River will inevitably increase its investment in Bitcoin and Ethereum.

Massachusetts Life Insurance Company: Purchase of $100 million in Bitcoin digital currency is accepted by the mainstream

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

MassMutual bought the bitcoins through a New York-based fund manager called NYDIG. The investment is a tiny fraction of a coin for the Springfield, Massachusetts-based insurer, which had nearly $235 billion in general investment accounts as of Sept. 30. But it signals further momentum for bitcoin.

The continuous entry of US listed companies, asset management companies, insurance companies, etc. may lead to the continuous attention of mainstream companies in other countries. A small step for mainstream companies may be a big step for the development of Bitcoin. We expect more and more companies to allocate crypto assets such as Bitcoin.