The coronavirus pandemic was indeed a landmark event — not only for the financial sector but for the world at large. Some had ambitions and goals they wanted to accomplish before the year was out, but they had to quit. Companies had to file for bankruptcy, and people had lost their jobs.
Like another area of the global economy, the financial sector has also suffered greatly due to the pandemic. Countries have been struggling to keep their economies alive, while people have been searching for ways to remain solvent.
It goes without saying that capital markets and financial institutions worldwide are particularly fragile at this point. This is the extent of risk the world has never seen before. Although the 2008 global financial crisis was insufficient to prepare us for the effect that COVID-19 will have on the world economy.
However, one factor that has so far managed to survive the storm has been the crypto market. Though Bitcoin (BTC) fell to $3,800 in March, the top cryptocurrency value continued to rise and expand faster than any other investment tool in the world.
The stock market has just started to recover, and alternative assets remain unpredictable forever. Cryptocurrencies, however, were going high.
Understanding the forms of crypto investor
Basically, when it comes to crypto investors, there are two types:
- Retail investors: everyday people looking to buy cryptocurrencies for several reasons, particularly investment and payment vehicles.
- Institutional investors: high net worth individuals and corporations trying to make a profit and investment in properties.
Many could disagree about how retail investors have responded to Bitcoin during the pandemic, using data to back up their claims. However, it is much easier to calculate institutional crypto demand.
Fortunately, it seems that the global market for Bitcoin and many other cryptocurrencies have been at an optimum stage.
How asset management companies work
One of the easiest ways to grasp this pattern is to see how many wealth management and institutional investment companies exist. So far, a lot of them have made substantial gains.
This month, the Pantera Capital asset management company disclosed in a disclosure report to the United States Securities and Exchange Commission that its Pantera Investment Fund III had raised $164,705,834 to date. The Fund, launched in 2018, has raised $68,841,379 of its cumulative audience over the past 12 months.
Pantera’s total investor ticket size also amounted to $1.77 million at the time — more than four times that of 2019 and almost doubled that of 2018. As stated by the firm, that number represented an uptick in institutional investors’ interest — its primary sector.
Investments in Grayscale
No global investment company has done better in the crypto industry than Grayscale Investments, New York. Grayscale is currently the largest asset management company in the crypto industry. The business started to see major gains last year after Bitcoin eventually broke out of its slump in 2018.
However, the company reported even better results around the board in 2020. Last month, the company reported in a tweet that its overall assets under management had risen to $5.1 billion — about $1 billion in less than two weeks.
The company announced that it had doubled the assets under control in its Bitcoin Cash (BCH) fund, from $6 million to $12.8 million. His confidence in Bitcoin saw the biggest gains, with $782 million added. The Ethereum (ETH), Ethereum Classic (ETC), and Litecoin (LTC) trusts have contributed $174 million, $12.7 million, and $6.7 million.
Altogether, Grayscale has reported that its assets under management are $5.2 billion, of which Bitcoin alone is $4.4 billion.
Grayscale attributed its development over an ad blitz that promoted bitcoin and crypto investment to a wide audience. Whether or not this is real, the fact that its numbers have risen so impressively indicates that institutional investors are seriously considering crypto investments.
Opportunities for all
All of these have pointed to many of Bitcoin’s enthusiasts as the most effective protection against the coming global recession.
Tahini, a Middle East restaurant based in Canada, announced earlier this week in a Twitter thread that it had switched its entire asset reserve to Bitcoin when the pandemic started. The restaurant clarified that it saw the Canadian government inject more capital into the economy to preserve profitability and avoid companies’ closing. While both the restaurant and the government understood the reasoning, they also knew the consequences.
The change has helped the restaurant to date. CoinMarketCap data shows that Bitcoin grew from $6,720 on March 25—the day the Government of Canada revealed its economic stimulus plan — to $11,500 on the day Tahini tweeted.