Increasing amounts of capital are flowing into the crypto and blockchain start-up markets. By following the money, investors can uncover new profit opportunities. Here's some recent news you won't want to miss.
Institutional demand for crypto is rising
Digital asset investment firm Grayscale saw its assets under management triple from $926 million to $2.7 billion in the second quarter amid a sharp rebound in the crypto market.
In addition to rising prices, Grayscale also benefited from inflows of $85 million in the second quarter, up from $42.7 million in the first quarter and $30.1 million in the fourth quarter of 2018. Notably, this occurred despite the fact that the Grayscale Bitcoin Trust (OTC:GBTC) was closed to new investment in May and June. Still, with the price of Bitcoin rising sharply in recent months, Grayscale Bitcoin Trust delivered an impressive 178.8% in the second quarter.
Interestingly, Grayscale said that institutional investors (such as hedge funds and family offices) made up 84% of total inflows, the highest percentage of total demand for its products since it began reporting this metric in July 2018. Rising institutional demand for cryptoassets such as Bitcoin is a key component of many crypto bulls' investment theses, and Grayscale's report gives evidence that more of this kind of capital is beginning to flow into this nascent asset class. If this continues, it could help to drive the price of Bitcoin and other cryptocurrencies higher.
Shell invests in blockchain-based energy system
Shell Ventures, the corporate venture capital arm of international oil titan Royal Dutch Shell (NYSE:RDS-A), is investing in blockchain-focused energy company LO3.
LO3 says it has developed a system that overcomes the challenge of integrating distributed energy resources into supply networks. The company says the system "promises to democratize the energy industry" by allowing people to both produce and consume electricity at their homes and businesses.
Shell's investment will help LO3 scale its "blockchain-based energy networks around the world," according to LO3 CEO Lawrence Orsini. "Energy is going through a revolution, with renewable distributed energy resources increasingly picking up market share -- but to integrate them efficiently we need to reinvent our energy networks," Orsini said. "These investments will help us accelerate the rollout of less carbon-intensive microgrids, which help all stakeholders benefit through distributed, decentralized, and decarbonized local energy transactions and demand response energy management on a building-by-building level."
As the energy industry transitions from large-scale power production to a more distributed model, LO3 hopes to create an energy economy that allows both producers and consumers to benefit. Its app will allow users to choose how and when to use their local energy resources and select the specific sources from which they purchase those resources. Its blockchain-based platform will manage this process, as well as the payment agreements.
LO3 says its system will enable a wide array of new use cases, such as peer-to-peer energy trading, energy hedging for businesses, and dynamic electric vehicle charging.
All told, by utilizing the power of blockchain technology, innovative businesses like LO3 could help to bring new efficiencies and possibilities to the global energy markets.