Bitcoin Institutional Demand Accelerates in 2021 Says Grayscale CEO

The CEO of the world’s largest digital asset manager, Grayscale, says that the demand from institutions has only accelerated in 2021. He also said that the narrative for large corporations to jump on the Bitcoin bandwagon has shifted from “why” to “why not.”

Why Not Buy Bitcoin?

A couple of years back, the cryptocurrency community was celebrating the fact that some hedge funds are talking about Bitcoin, eagerly anticipating their decision to finally join the BTC bandwagon and buy Bitcoin as part of their portfolio.

Over the past year or so, this narrative has shifted immensely. Major public companies, the latest of which being none other than Elon Musk’s Tesla, have already put Bitcoin on their balance shift. Large hedge funds and billionaire investors are on board, allocating certain portions of their portfolio to buy Bitcoin.

This has been perhaps mostly reflected in the tremendous growth in the assets under management of Grayscale – the world’s leading digital asset fund. Just recently, CryptoPotato reported that they’ve managed to top $30 billion in AUM – a record for the company. Now, the CEO, Michael Sonnenschein, says that the demand is nowhere near decreasing. In fact, he said that it’s only accelerating in 2021, despite 2020 being a massive year for Bitcoin’s institutional adoption.

In addition, Michael Sonnenschein revealed that the narrative for companies to buy Bitcoin has changed from “why” to “why not,” indicating that the merits of the cryptocurrency have become more than apparent.

Institutions Lining Up to Buy Bitcoin

This doesn’t come as a surprise in the current Bitcoin landscape. Just a few days ago, CryptoPotato reported that Bill Miller’s fund, Miller Opportunity Trust, has filed a document with the SEC that reveals its intentions to invest in the Grayscale Bitcoin Trust.

Moreover, it’s not only Bitcoin that the trust has been hoarding. Last week, Grayscale also added a massive $38 million worth of ETH after having halted its Ethereum Trust for more than a month.


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BadgerDAO partners with Yearn.Finance to build sustainable Bitcoin vaults

Today, Bitcoin-on-Ethereum yield vault project BadgerDAO and fellow yield vault platform Yearn.Finance announced a partnership designed to bring Yearn’s sustainable vault expertise to Badger. 

“Today we’re excited to develop a partnership that will bring our teams together to further accelerate best in class BTC vaults for the industry,” BadgerDAO said in a blog post. “This is a step to further secure users funds as we continue to introduce more Yearn developed, maintained and secured vaults to our users.”

Badger will migrate their current synthetic Bitcoin vault balance to Yearn’s, and the Yearn vault will display in Badger’s app. Additionally, the two protocols will work together to build a new WBTC vault. The fees from the vaults will be shared between the Badger and Yearn protocols.

The partnership between the yield vault projects accomplishes two goals: ensures sustainable yield for Badger vaults, and grants Yearn strategists meatier compensation.

Currently much of the yield from Badger vaults is supported by the emission of $BADGER, BadgerDAO’s governance token, and $DIGG, a synthetic rebasing Bitcoin. However, there is a cap on these yields as only 21 million BADGER and 4 thousand DIGG are currently scheduled to be minted. Eventually, the yields will dry up.

In their announcement post, BadgerDAO noted that partnering with Yearn will enable them to construct high-yield vaults even without the distribution of governance tokens — ultimately a more sustainable model.

“Yearn built strats help as yearn v2 is solely focused on sustainable non subsidized yield,” said Palmer, a soon-to-be core member of BadgerDAO. “We are aligned with andre in the train of thought it’s best to partner and collaborate with the best in niches. Yearn is the best at non subsidized strategies.”

In return, Yearn vault strategists — whom the announcement noted “are the best in the world” at what they do — will receive an additional reward on top of their normal vault performance fee from Badger’s “developer mining program,” a $258 million dollar fund dedicated to incentivizing developers to build with Badger.

“Our goal is to create positive cash flow products. We can’t give badger/digg out forever,” said BadgerDAO founder Chris Spadafora. “ […] Helping compensate strategists through our dev pool will ensure developers are incentivized and are rewarded.”