Grayscale's six major cryptocurrency trust funds suspend accepting new investments

Crypto asset manager Grayscale announced on Monday that its Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, and Digital Large Cap Fund Trusts are currently not accepting new investments.

Grayscale periodically closes its cryptocurrency trust fund to conduct so-called "private placement" financings.

It is reported that the lock-up period for Bitcoin stocks is 6 months. After this period, investors can sell these stocks to retail investors.

Grayscale last suspended its purchase of GBTC shares in June of this year. Many industry insiders believe that such a temporary suspension is likely to affect institutional demand for Bitcoin.

Even with a moratorium on new investments, Grayscale will still be able to raise more capital from existing investors until it reopens to new investors.

Grayscale has issued a total of 536,000 bitcoins so far. The growth of the Bitcoin Trust has been accelerating as the Bitcoin Trust soared to $5 billion in the fourth quarter of 2020. In this quarter, Grayscale added 115,236 BTC.

A week ago, Grayscale CEO Michael Sonnenshein said Grayscale’s inflows had increased sixfold compared to last year.

Back in October, Grayscale released its third-quarter investment report, according to which the company raised $1.05 billion for its investment products, the largest single-quarter capital inflow in the company's history. At the time, the company's assets under management even surged 147% from the beginning of the year.

A sharp slowdown in GBTC inflows could increase the likelihood of a Bitcoin price pullback, JPMorgan analysts said on Monday.

Recently, crypto wallet Lumi Wallet saw a 209% increase in Bitcoin purchases after it launched the Apple Pay feature. Adding Apply Pay to the platform allows customers to purchase cryptocurrencies more easily. The typical way to purchase cryptocurrencies with a credit card takes an average of 10-15 minutes because of KYC verification. In Lumi Wallet using Apple Pay, users can skip KYC and purchases take less than 15 seconds.

Image source: Grayscale

byAmy Liu

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