Rothschild Investment Puts in $5 Million in Grayscale Ethereum Trust

Rothschild Investment Puts in $5 Million in Grayscale Ethereum Trust

Published: April 19th, 2021

 On Thursday, April 15, Rothschild Investment disclosed that it had bought $4.75 million worth of Grayscale Ethereum Trust shares. The more than 260,000 shares are the first investment of their kind that the wealth management corporation has put in the Ethereum investing product.

A Chicago-based investment corporation has put in almost $5 million in a cryptocurrency trust. On Thursday, April 15, Rothschild Investment announced that it had bought 265,302 shares worth $4.75 million of the Grayscale Ethereum Trust. This is the first venture of its kind that Rothschild Investment has put in the Ethereum trust that Grayscale runs.

The Institutional investment manager has also buoyed its position on the Grayscale Investment’s Bitcoin trust. The almost 8,000 shares the asset fund manager has added to the Bitcoin trust now bring its collective Bitcoin standing to nearly 39,000 shares worth about $2 million.

The purchase affirms Rothschild Investment’s interest in the cryptocurrency sphere. The firm has more than $50 billion in assets under its management. However, its investment in the Grayscale Ethereum Trust is the first time the firm is putting money in the world’s second cryptocurrency.

Ethereum has gotten attractive lately. On Thursday, April 15, the coin broke the $2,500 ceiling to trade at $2,503.92. According to the Securities and Exchange Commission (SEC) filings, Rothschild Investments is just one of the few institutional fund managers to seek exposure to Ethereum through the Grayscale’s trust product.

Despite investing in only two of the available cryptocurrencies, Rothschild Investment is not new to the crypto space. The firm started accumulating Bitcoin back in 2017. This latest filing shows that Rothschild Investment’s appetite for crypto is not fading.

According to Ryan Sean Adams, the founder of Mythos Capital, a cryptocurrency investment company, Bitcoin seems to be the gateway drug to Ethereum. Technically, Adams’s assertions are correct if anyone retrospects on Rothschild Investment’s strategy.

Rothschild Investment and its Rich History in Crypto

Rothschild Investments has been around since 1908. It has done things by the book during its long, illustrious history but has also gone against the convention for a good number of times. It started investing in crypto well before the mass inflow of institutions that the crypto space is currently witnessing. An SEC filing dated July 2017 shows the firm owning $210,000 in GBTC.

According to Brian Quarmby, a staffer at Cointelegraph, the investment firm could not have chosen a better companion for their crypto adventure. Grayscale Investment is a leading digital asset manager in the U.S. The company that is owned by Digital Currency Group, CoinDesk’s parent company, has about 660,000 BTC, which is about 3.5% of the total Bitcoin in circulation.

Rothschild Investment’s Ethereum available in asset under management is worth about $7 billion. The investment comes just in the wake of the globe’s second cryptocurrency breaking its all-time high to go past $2,500 after the Berlin Folk.

The upgrade, which prepares the Ethereum network for a much bigger London Hard Fork expected sometime in July, incorporated four Ethereum Network Improvement Proposals (EIPs).

The hype surrounding Ether ((ETH), the native cryptocurrency of the Ethereum network), was evident in the derivatives markets. The open interest in ETH options increased to $3 billion on Wednesday, April 14, a record high.

Market experts said the latest surge could be attributed to the news that Rothschild Investments took an almost $5 million stake in the Grayscale Ethereum Trust. However, not all market analysts attribute ETH’s rise to a single event. A cross-section of experts has credited Ethereum’s rise in the past week to the happenings in the decentralized finance (DeFi) space, the overall market rally, and increased interest in Non-Fungible tokens (NFT).

Legitimizing the Crypto Asset Class

Activities such as the Rothschild Investment purchase drive the conventional acceptance of cryptocurrencies as an asset class. Since Square and MicroStrategy arrived in the virtual currency marketplace, a domino effect has gone into action, attracting more market entrants. These newcomers have contributed to an increase in market value.

Just recently, the market capitalization of cryptocurrencies shot past the $2 trillion mark for the first time.

According to Rahul Nambiampurath, a crypto enthusiast and staffer attached to BeInCrypto, ETH 2.0, the planned upgrades to the Ethereum protocol could send the coin’s cost higher. The platform has issued planned updates through a staggered release meant to happen over the next two years.

The upgrades started with a beacon chain contract, which was deployed on December 1, 2020. The amount of ETH stacked on the contract has increased considerably since the deployment.

Some other anticipated changes supposed to improve the integrity of the Ethereum protocol include Proof-of-Stake and Sharding. In the end, the Ethereum network should work faster, more efficiently, and at far cheaper costs compared to the situation now.

Rahul said that the gas issues plaguing the network currently make the proposed changes very attractive to investors. He added that network users are anxious to see the proposed scaling solutions implemented.

The market is very optimistic about the changes that the Ethereum network is planning. Investors, in particular, have their eyes trained on the NFT and DeFi sectors that are snowballing. Rahul said the two areas are pushing up ETH’s price potential and its chance to compete.

Outstripping Bitcoin Where It Matters

The steady interest and developments around ETH recently saw the coin go above Bitcoin as the most sought-after cryptocurrency by YouTube searches. ETH also sits above Bitcoin in terms of price appreciation.

While Bitcoin is up more than 700% year-on-year, Ether has increased by more than 1,100% of the same period. Besides, the globe's second virtual currency by market capitalization is attracting massive support from big-name investors.

Mark Cuban was quoted saying that the protocol’s long-awaited 2.0 upgrades would inspire more decentralized applications (dApps) that would dwarf Bitcoin.

The increasing viewership on YouTube is an authentic validation for a coin whose market cap has now surpassed $250 billion. Rahul said that with more than 250 million views on Ethereum-related videos, Rothschild Investment’s move might prove timely.

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