Digital Asset

Investment
Report
Q4 2020

grayscale.co
 Bitcoin:
2020 Year
In Review
$30,000
December 16
Bitcoin breaks $20k
and previous highs
$25,000
July 22 December 10
OCC releases guidance MassMutual announces
that banks can custody $100mm Bitcoin
crypto assets investment
$20,000
June 10 November 9
Bitcoin Price (USD)

Fed Chair Powell “not even Stanley Druckenmiller

thinking about thinking announces Bitcoin
about raising rates” position.
$15,000
May 7
Paul Tudor Jones
announces Bitcoin
position
$10,000
August 11 November 7
MicroStrategy US presidential
announces adding race called for
Bitcoin to Treasury Joe Biden
$5,000
March 12 March 27
Global markets
CARES Act adds $2.2 trillion
crash, greatest US
of economic stimulus
crash since 1987
$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Bitcoin’s value was tested by a global pandemic, a devastating stock market crash, and
swirling geopolitical tensions. Yet amid unprecedented US monetary policy, Bitcoin
proved resilient and ended 2020 as one of the best performing assets of the year.

Bitcoin’s ability to perform during a period of significant volatility attracted the attention
of more financial institutions, investors, and industry observers than ever before.
Influential figures in finance and technology showed public support for Bitcoin as an
investment, product, and monetary good. When the history books are written, 2020 will
be noted as a major inflection point for the adoption of Bitcoin, and digital currencies
more broadly.
Grayscale
2021 Outlook
• A Bitcoin arms race - Bitcoin is becoming a widely-used diversifier in portfolios. Major investors,
advisory firms, and even banks are shifting their view on Bitcoin. The career risk of allocating
to Bitcoin has turned into a career risk of being a laggard. In 2020 we saw institutions adding
Bitcoin to their balance sheets - in 2021 we may see nation states follow suit.

• Financial advisor interest - RIA interest surged in Q4 2020, and more financial advisors are re-
ceiving questions about digital currencies than ever before. With the performance of major digital
currencies like Bitcoin in 2020, it’s reasonable to expect that more investors and advisors alike will
be considering how to best fit this asset class within a larger portfolio. Wealth managers advise on
approximately $80 trillion in assets and most have not yet recommended digital assets.1

• Bitcoin rewards could become a significant source of demand for Bitcoin - US credit cards
account for $4 trillion in annual spending and debit cards account for over $3 trillion in annual
spending.2 Fold, CashApp, and BlockFi are among the businesses that launched cards with Bit-
coin rewards in 2020. We expect major credit card companies could follow suit as they see the
success of these Bitcoin products.

• Bitcoin recognized as a clean energy incentive - Energy consumption and geographical concen-
tration of mining in China have long been hot topics for Bitcoin. That narrative is changing rapidly.
North America is becoming a mining powerhouse, with the likes of Foundry, by integrating Bitcoin
mining into the most efficient energy infrastructure across the continent. Energy companies are
making a purely economical decision to put their previously wasted energy to good use and get
paid for it. Bitcoin mining is helping to subsidize underutilized energy infrastructure and may
be integrated into public green energy initiatives.

• Decentralized Finance is emerging - Billions in liquid lending, borrowing, and exchange have
made decentralized finance (DeFi) the strongest non-Bitcoin use case in the digital currency
ecosystem. As the search for yield intensifies in traditional markets, we expect major financial
firms to consider integrating with decentralized protocols.

• Nation-state adoption of digital currencies - While many countries have laws around digital
currencies, few have seriously introduced or incorporated them into the set of financial tools
governments have at their disposal. Recent guidance from the OCC suggests that US banks may
look to incorporate digital currencies into their settlement infrastructure.3 In 2021 we may see the
beginning of digital currencies integrating into national banking infrastructures.

1. “Evolution Revolution, A Profile of the Investment Advisor Profession”, Investment Advisor Association, 2019, https://higherlogicdownload.s3.amazonaws.
com/INVESTMENTADVISER/aa03843e-7981-46b2-aa49-c572f2ddb7e8/UploadedImages/publications/Evolution_Revolution_2019_FINAL.pdf
2. “The Federal Reserve Payments Study”, Board of Governors of the Federal Reserve System, 2019, https://www.federalreserve.gov/paymentsystems/2019-
December-The-Federal-Reserve-Payments-Study.htm.
3. “Federally Chartered Banks and Thrifts May Participate in Independent Node Verification Networks and Use Stablecoins for Payment Activities,” OCC,
January 4, 2021, https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-2.html.
Q4 | 2020

Digital Asset
Digital Asset
Investment
Report

Investment
TOTAL AUM4

$20.2B
Report
4Q20 Highlights5
• Total Investment into Grayscale Products6: $3.3 billion
• Average Weekly Investment – All Products: $250.7 million
• Average Weekly Investment – Grayscale® Bitcoin Trust: $217.1 million
• Average Weekly Investment – Grayscale® Ethereum Trust: $26.3 million
• Average Weekly Investment – Grayscale® Digital Large Cap Fund: $1.6 million
• Average Weekly Investment – Grayscale Products ex Bitcoin Trust7: $33.6 million
• Majority of investment (93%) came from institutional investors, dominated by asset managers.

Year Ended 2020 (“YE20”) Highlights8

• Total Investment into Grayscale Products: $5.7 billion
• Average Weekly Investment – All Products: $109.8 million
• Average Weekly Investment – Grayscale® Bitcoin Trust: $90.0 million
• Average Weekly Investment – Grayscale® Ethereum Trust: $15.2 million
• Average Weekly Investment – Grayscale® Digital Large Cap Fund: $1.4 million
• Average Weekly Investment – Grayscale Products ex Bitcoin Trust9: $19.8 million
• Majority of investment (86%) came from institutional investors, dominated by asset managers.

The Takeaway
2020 was a hallmark year for Grayscale and digital assets more broadly. Thank you to
©2021 Grayscale Investments, LLC

the community and our investors for making it possible. We are proud to share data
that reflects the massive adoption throughout 2020, and specifically, 4Q20.

4. As of December 31, 2020.

5. For the period from October 1, 2020 through December 31, 2020.
6. On December 23, 2020, the Sponsor announced that it had ceased accepting new subscriptions for the Grayscale XRP Trust (XRP) (“XRP Trust”)
private placement following the Securities and Exchange Commission’s December 22, 2020 decision to file a federal court action against certain third
parties as-serting that XRP is a “security” under federal securities law. On January 13, 2021, the Sponsor announced that it had commenced dissolution of
XRP Trust. As a result of the foregoing, XRP Trust is not reflected in this report.
7. “Grayscale Products ex Bitcoin Trust’’ include Grayscale Bitcoin Cash Trust, Grayscale Ethereum Trust, Grayscale Ethereum Classic Trust, Grayscale
Horizen Trust, Grayscale Litecoin Trust, Grayscale Stellar Lumens Trust, Grayscale Zcash Trust, and Grayscale Digital Large Cap Fund.
8. For the period from January 1, 2020 through December 31, 2020.
9. See footnote 7.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT.
ASSETS UNDER MANAGEMENT (AUM), INFLOWS, TOTAL INVESTMENT AND AVERAGE WEEKLY INVESTMENT ARE CALCULATED USING THE DIGITAL
ASSET REFERENCE RATE FOR EACH PRODUCT, WHICH ARE NOT MEASURES CALCULATED IN ACCORDANCE WITH GAAP. SEE NON-GAAP MEASURES
FOR MORE
PLEASE INFORMATION.
REVIEW UNLESS
IMPORTANT OTHERWISE &
DISCLOSURES NOTED,
OTHERALL FIGURES INCLUDED
INFORMATION HEREIN
AT THE ARETHIS
END OF CALCULATED
REPORT. USING NON-GAAP METHODOLOGIES. 4
THE PRODUCTS ARE DISTRIBUTED BY GENESIS GLOBAL TRADING, INC. (MEMBER FINRA/SIPC, MSRB REGISTERED)
Q4 | 2020

$3 Billion Dollar Quarter: Grayscale experienced increased investor demand, with

approximately $3.3 billion of inflows. Investment into the Grayscale family of products
surpassed $5.7 billion during 2020, more than four times the $1.2 billion cumulative
inflow into the products from 2013-2019.
Digital Asset
Investment Since inception, the Grayscale family of products has experienced nearly $6.9 billion of
Report inflows.10

$20 Billion Dollar AUM: Grayscale began the year with $2.0 billion in assets under
management and ended 2020 with $20.2 billion. In 2020, Grayscale Bitcoin Trust was
among the fastest growing investment products in the world, growing from $1.8 billion to
$17.5 billion AUM.11 This is an incredible testament to the maturation of the digital currency
ecosystem.

Grayscale Bitcoin Trust Inflows Outpace Mined Bitcoin: As we have noted in prior
reports, the inflows into Grayscale Bitcoin Trust have continued to grow as a percent of
mined Bitcoin. This metric is significant because miners are known to be the market’s
natural sellers, often using their newly mined Bitcoin to pay for operating expenses. In
4Q20, Bitcoin inflows were approximately 194% of mined Bitcoin.

However, these comparisons are simply to illustrate supply and demand in the market.
They do not provide insight into the destination of any newly mined Bitcoin during the
measured periods.

Institutions are Here: Institutions have historically accounted for a majority of Grayscale
inflows. This was especially true in 4Q20 as institutions accounted for 93% of capital
inflows, or $3.0 billion. This may not come as a surprise given the recent flurry of news
that institutions have warmed up to Bitcoin. Indeed, Grayscale Bitcoin Trust accounted for
87% of all inflows to our product family, the highest proportion since 2Q17, further
evidence of institutions looking to Bitcoin as a reserve asset.

The average commitment among institutions is also growing at a significant pace. The
average commitment from institutions was $6.8 million, up from an average of $2.9 million
in 3Q20.

Surging Demand from RIAs: In 4Q20, Grayscale received substantial inbound interest
from wealth managers interested to learn more about Bitcoin to satisfy the growing
number of client requests. This is part of an emerging trend of the last six months that is
critical for continued adoption.
©2021 Grayscale Investments, LLC

Quarterly Perspective

In 4Q20, a majority of Grayscale’s family of products significantly outperformed major

indices even when taking into account fees, expenses, and other costs associated with
the funds.

10. Inception date: September 25, 2013.

11. Source: Bloomberg, comparison of ETPs with over $1 billion AUM on 1/2/2020

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 5
Q4 | 2020

FIGURE 1: MULTI-ASSET CLASS PERFORMANCE – 4Q2012

OCTOBER 1, 2020 THROUGH DECEMBER 31, 2020

Bitcoin (BTC) 174%

Litecoin (LTC) 170%
Grayscale Digital Large Cap Fund 154%
Digital Asset
Horizen (ZEN) 115%
Investment
Ethereum (ETH) 110%
Report Stellar Lumens (XLM) 76%
Bitcoin Cash (BCH) 52%
MSCI Emerging Markets Index 19%
MSCI World Index 16%
Nasdaq Composite 16%
MSCI EAFE Index 16%
Bloomberg Commodity Index 12%
Brazilian Real (BRL) 9%
Russian Ruble (RUB) 6%
Ethereum Classic (ETC) 5%
Canadian Dollar (CAD) 5%
Euro (EUR) 4%
Bloomberg Barclays Global Bond Index 3%
Zcash (ZEC) -1%
Argentine Peso (ARS) -8%
VIX Index -18%

Grayscale’s assets under management reached all-time highs during 4Q20 as prices rose
and capital flowed in from institutions. YTD, Grayscale’s AUM went from $2.0 billion to
$20.2 billion, an approximately 10x increase.

FIGURE 2: GRAYSCALE AUM SINCE INCEPTION

SEPTEMBER 25, 2013 THROUGH DECEMBER 31, 2020 Index Grayscale

AUM Growth (Cumulative) 180,585.0x

AUM Growth (Annualized) 4.3x

$21,000

$18,000

$15,000
AUM ($MM)

$12,000

$9,000
©2021 Grayscale Investments, LLC

$6,000

$3,000

$0
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20

12. Source: Bloomberg, CoinMarketCap.com, Grayscale. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RETURNS.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 6
Q4 | 2020

Over the last seven years, investor interest built slowly before rapidly accelerating. In fact,
the four consecutive record shattering quarters in 2020 mark a turning point for Grayscale
and digital assets as a whole. Specifically, the monetary and fiscal measures by governments
globally served as the catalyst for the surge of interest in Bitcoin.
Digital Asset
Investment
Report FIGURE 3: GRAYSCALE ANNUAL INFLOWS SINCE INCEPTION
SEPTEMBER 25, 2013 THROUGH DECEMBER 31, 2020

$6.0B

$5.0B

$4.0B

$3.0B

$2.0B

$1.0B

$0.0B
2013 2014 2015 2016 2017 2018 2019 2020

Demonstrated in Figure 4 below, institutional investors continue to increase allocation sizes.

At $6.8 million, the average institutional allocation was more than double the $2.9 million
average in 3Q20.

FIGURE 4: AVERAGE INSTITUTIONAL ALLOCATION BY QUARTER

JANUARY 1, 2019 THROUGH DECEMBER 31, 2020

$7,000,000

$6,000,000

$5,000,000
©2021 Grayscale Investments, LLC

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 7
Q4 | 2020

As monetary inflation became a pressing concern, institutional investors took action by

allocating to Bitcoin. This was seen in the media and supported by conversations our team
had with investors. Figure 5 demonstrates that in this paradigm, Bitcoin took center stage in
the market and in our product suite.
Digital Asset
Investment FIGURE 5: BITCOIN TRUST AS A PROPORTION OF INFLOWS FROM INSTITUTIONAL INVESTORS
Report JANUARY 1, 2020 THROUGH DECEMBER 31, 2020

Grayscale Bitcoin Trust Grayscale products ex Grayscale Bitcoin Trust

79% 87%
72%
51%

1Q20 2Q20 3Q20 4Q20

While the supply of newly-created Bitcoin has slowed as a result of the halving in May 2020,
the inflows into Grayscale have accelerated meaningfully. The amount of Bitcoin flowing into
Grayscale Bitcoin Trust during 4Q20 was nearly double the amount mined over the same
period. This trend continues to be a major contributing factor in the limited available supply
of Bitcoin in the market.

Again, this only illustrates the magnitude of inflows and does not indicate that mined Bitcoins
are being directly invested into Grayscale Bitcoin Trust.

FIGURE 6: GRAYSCALE BITCOIN TRUST INFLOWS AS A PROPORTION OF MINED BITCOIN13

JANUARY 1, 2020 THROUGH DECEMBER 31, 2020

Inflows as a Proportion of Mined Bitcoin

194%
©2021 Grayscale Investments, LLC

70% 77%

27%

1Q20 2Q20 3Q20 4Q20

13. Source: Grayscale, Coin Metrics. For comparison only. This does not reflect the direct flow of newly mined Bitcoin.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 8
Q4 | 2020

With the significant growth and utilization of Grayscale products by the investment
community, our proportional management over the circulating supply of various digital assets
has increased substantially. Over the course of the year, the amount of circulating Bitcoin
under Grayscale management increased from 1.45% to 3.31%. Similarly, the proportion of
Digital Asset circulating Ethereum managed by Grayscale increased from 0.47% to 2.61% in 2020.
Investment
Report
FIGURE 7: GRAYSCALE ASSETS VS CIRCULATING SUPPLY

Q4 2019 Q4 2020

Bitcoin 1.45% 3.31%

Bitcoin Cash 0.10% 1.33%

Ethereum 0.47% 2.61%

Ethereum Classic 7.79% 10.55%

Horizen 5.12% 5.23%

Litecoin 0.03% 1.78%

Stellar 0.03% 0.12%

Zcash 2.01% 1.99%

AUM as % of All Digital Assets 1.05% 2.65%

Next, we will provide our standard series of investment activity analytics for 4Q20 and YE20.
©2021 Grayscale Investments, LLC

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 9
Q4 | 2020

Investment Activity through the Grayscale Lens

Grayscale raised $3.3 billion in 4Q20, bringing YE20 inflows to $5.7 billion.
Digital Asset
Investment
FIGURE 8: GRAYSCALE CUMULATIVE INFLOWS BY PRODUCT – 4Q2014
Report OCTOBER 1, 2020 THROUGH DECEMBER 31, 2020

Bitcoin Ethereum Litecoin

Ethereum Classic Digital Large Cap Zen
Zcash Bitcoin Cash Stellar Lumens

$3,500,000,000

$3,000,000,000 Total: $3.3B

$2,500,000,000

$2,000,000,000

$1,500,000,000

$1,000,000,000

$500,000,000

$0
08-Oct-20

15-Oct-20

22-Oct-20

29-Oct-20

05-Nov-20

12-Nov-20

19-Nov-20

26-Nov-20

03-Dec-20

10-Dec-20

17-Dec-20

24-Dec-20

31-Dec-20
FIGURE 9: GRAYSCALE CUMULATIVE INFLOWS BY PRODUCT – YE2015
JANUARY 1, 2020 THROUGH DECEMBER 31, 2020

Bitcoin Ethereum Litecoin

Ethereum Classic Digital Large Cap Zen
Zcash Bitcoin Cash Stellar Lumens

$6,000,000,000

$5,000,000,000 Total: $5.7B

$4,000,000,000

$3,000,000,000
©2021 Grayscale Investments, LLC

$2,000,000,000

$1,000,000,000

$0
08-Jan-20
15-Jan-20
22-Jan-20
29-Jan-20
05-Feb-20
12-Feb-20
19-Feb-20
26-Feb-20
04-Mar-20
11-Mar-20
18-Mar-20
25-Mar-20
01-Apr-20
08-Apr-20
15-Apr-20
22-Apr-20
29-Apr-20
06-May-20
13-May-20
20-May-20
27-May-20
03-Jun-20
10-Jun-20
17-Jun-20
24-Jun-20
01-Jul-20
08-Jul-20
15-Jul-20
22-Jul-20
29-Jul-20
05-Aug-20
12-Aug-20
19-Aug-20
26-Aug-20
02-Sep-20
09-Sep-20
16-Sep-20
23-Sep-20
30-Sep-20
07-Oct-20
14-Oct-20
21-Oct-20
28-Oct-20
04-Nov-20
11-Nov-20
18-Nov-20
25-Nov-20
02-Dec-20
09-Dec-20
16-Dec-20
23-Dec-20
30-Dec-20

14. Grayscale Bitcoin Trust, Grayscale Ethereum Trust and Grayscale Digital Large Cap Fund were periodically closed to new investment
during the measured period.
15. Grayscale Bitcoin Trust, Grayscale Ethereum Trust and Grayscale Digital Large Cap Fund were periodically closed to new investment
during the measured period.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 10
Q4 | 2020

Average weekly investment across all products in 4Q20 was $250.7 million, while average
weekly investment for YE20 was $109.8 million.

FIGURE 10: GRAYSCALE WEEKLY INFLOWS ALL PRODUCTS – 4Q2016

Digital Asset OCTOBER 1, 2020 THROUGH DECEMBER 31, 2020
Investment
Report Bitcoin Ethereum Litecoin
Ethereum Classic Digital Large Cap Zen
Zcash Bitcoin Cash Stellar Lumens Total Weekly Average

$900,000,000

$800,000,000 Average: $250.7M

$700,000,000

$600,000,000

$500,000,000

$400,000,000

$300,000,000

$200,000,000

$100,000,000

$0
08-Oct-20

15-Oct-20

22-Oct-20

29-Oct-20

05-Nov-20

12-Nov-20

19-Nov-20

26-Nov-20

03-Dec-20

10-Dec-20

17-Dec-20

24-Dec-20
FIGURE 11: GRAYSCALE WEEKLY INFLOWS ALL PRODUCTS – YE2017
JANUARY 1, 2020 THROUGH DECEMBER 31, 2020

Bitcoin Ethereum Litecoin

Ethereum Classic Digital Large Cap Zen
Zcash Bitcoin Cash Stellar Lumens Total Weekly Average

$700,000,000

$600,000,000 Average: $109.8M

$500,000,000

$400,000,000

$300,000,000
©2021 Grayscale Investments, LLC

$200,000,000

$100,000,000

$0
08-Jan-20
15-Jan-20
22-Jan-20
29-Jan-20
05-Feb-20
12-Feb-20
19-Feb-20
26-Feb-20
04-Mar-20
11-Mar-20
18-Mar-20
25-Mar-20
01-Apr-20
08-Apr-20
15-Apr-20
22-Apr-20
29-Apr-20
06-May-20
13-May-20
20-May-20
27-May-20
03-Jun-20
10-Jun-20
17-Jun-20
24-Jun-20
01-Jul-20
08-Jul-20
15-Jul-20
22-Jul-20
29-Jul-20
05-Aug-20
12-Aug-20
19-Aug-20
26-Aug-20
02-Sep-20
09-Sep-20
16-Sep-20
23-Sep-20
30-Sep-20
07-Oct-20
14-Oct-20
21-Oct-20
28-Oct-20
04-Nov-20
11-Nov-20
18-Nov-20
25-Nov-20
02-Dec-20
09-Dec-20
16-Dec-20
23-Dec-20
30-Dec-20

16. Grayscale Bitcoin Trust, Grayscale Ethereum Trust and Grayscale Digital Large Cap Fund were periodically closed to new investment
during the measured period.
17. Grayscale Bitcoin Trust, Grayscale Ethereum Trust and Grayscale Digital Large Cap Fund were periodically closed to new investment
during the measured period.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 11
Q4 | 2020

In 4Q20, inflows to Grayscale Bitcoin Trust were a record $2.8 billion. This brought YE20
Grayscale Bitcoin Trust inflows to $4.7 billion, over four times the cumulative inflows of the
previous six years.

Digital Asset
Investment FIGURE 12: GRAYSCALE BITCOIN TRUST CUMULATIVE WEEKLY INFLOWS – 4Q20
OCTOBER 1, 2020 THROUGH DECEMBER 31, 2020
Report

$3,000,000,000
Bitcoin

$2,500,000,000
Total: $2.8B

$2,000,000,000

$1,500,000,000

$1,000,000,000

$500,000,000

$0
08-Oct-20

15-Oct-20

22-Oct-20

29-Oct-20

05-Nov-20

12-Nov-20

19-Nov-20

26-Nov-20

03-Dec-20

10-Dec-20

17-Dec-20

24-Dec-20

31-Dec-20
FIGURE 13: GRAYSCALE BITCOIN TRUST CUMULATIVE WEEKLY INFLOWS – YE20
JANUARY 1, 2020 THROUGH DECEMBER 31, 2020

$5,000,000,000
Bitcoin
$4,500,000,000

Total: $4.7B
$4,000,000,000

$3,500,000,000

$3,000,000,000
©2021 Grayscale Investments, LLC

$2,500,000,000

$2,000,000,000

$1,500,000,000

$1,000,000,000

$500,000,000

$0
08-Jan-20
15-Jan-20
22-Jan-20
29-Jan-20
05-Feb-20
12-Feb-20
19-Feb-20
26-Feb-20
04-Mar-20
11-Mar-20
18-Mar-20
25-Mar-20
01-Apr-20
08-Apr-20
15-Apr-20
22-Apr-20
29-Apr-20
06-May-20
13-May-20
20-May-20
27-May-20
03-Jun-20
10-Jun-20
17-Jun-20
24-Jun-20
01-Jul-20
08-Jul-20
15-Jul-20
22-Jul-20
29-Jul-20
05-Aug-20
12-Aug-20
19-Aug-20
26-Aug-20
02-Sep-20
09-Sep-20
16-Sep-20
23-Sep-20
30-Sep-20
07-Oct-20
14-Oct-20
21-Oct-20
28-Oct-20
04-Nov-20
11-Nov-20
18-Nov-20
25-Nov-20
02-Dec-20
09-Dec-20
16-Dec-20
23-Dec-20
30-Dec-20

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 12
Q4 | 2020

In 4Q20, demand for Grayscale Products excluding Grayscale Bitcoin Trust grew to $436.4
million, up 35% QoQ, and up nearly 1300% from 4Q19. Much of the increase was driven by
continued inflows into Grayscale Ethereum Trust ($341.8 million), bringing YE20 inflows for
Grayscale Products excluding Grayscale Bitcoin Trust to $1.0 billion.
Digital Asset
Investment FIGURE 14: GRAYSCALE PRODUCTS EX BITCOIN TRUST CUMULATIVE WEEKLY INFLOWS – 4Q20
Report OCTOBER 1, 2020 THROUGH DECEMBER 31, 2020

Ethereum
Non BTC & ETH

$450,000,000
Grayscale Ethereum Trust: $341.8M
$400,000,000 Other: $94.6M
Total: $436.4M
$350,000,000

$300,000,000

$250,000,000

$200,000,000

$150,000,000

$100,000,000

$50,000,000

$0
08-Oct-20

15-Oct-20

22-Oct-20

29-Oct-20

05-Nov-20

12-Nov-20

19-Nov-20

26-Nov-20

03-Dec-20

10-Dec-20

17-Dec-20

24-Dec-20

31-Dec-20
FIGURE 15: GRAYSCALE PRODUCTS EX BITCOIN TRUST CUMULATIVE WEEKLY INFLOWS – YE20
JANUARY 1, 2020 THROUGH DECEMBER 31, 2020

Ethereum
Non BTC & ETH

$1,200,000,000
Grayscale Ethereum Trust: $789.4M
Other: $240.1M
$1,000,000,000 Total: $1.0B

$800,000,000
©2021 Grayscale Investments, LLC

$600,000,000

$400,000,000

$200,000,000

$0
08-Jan-20
15-Jan-20
22-Jan-20
29-Jan-20
05-Feb-20
12-Feb-20
19-Feb-20
26-Feb-20
04-Mar-20
11-Mar-20
18-Mar-20
25-Mar-20
01-Apr-20
08-Apr-20
15-Apr-20
22-Apr-20
29-Apr-20
06-May-20
13-May-20
20-May-20
27-May-20
03-Jun-20
10-Jun-20
17-Jun-20
24-Jun-20
01-Jul-20
08-Jul-20
15-Jul-20
22-Jul-20
29-Jul-20
05-Aug-20
12-Aug-20
19-Aug-20
26-Aug-20
02-Sep-20
09-Sep-20
16-Sep-20
23-Sep-20
30-Sep-20
07-Oct-20
14-Oct-20
21-Oct-20
28-Oct-20
04-Nov-20
11-Nov-20
18-Nov-20
25-Nov-20
02-Dec-20
09-Dec-20
16-Dec-20
23-Dec-20
30-Dec-20

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 13
Q4 | 2020

Investor Profiles
In 4Q20, Grayscale institutional capital represented 93% of total inflows, a meaningful uptick
alongside a number of public announcements from notable investors and asset managers.
Digital Asset For many investors, the risk of being too early quickly turned into risk of being too late.
Investment
Report

FIGURE 16: GRAYSCALE INVESTOR PROFILE BY TYPE 4Q20

4Q20 VS. YE20 YE20

93%
87%

8%
3% 2% 2% 3% 3%

Institutional Accredited Retirement Family

Investors Individuals Accounts Offices

The geographic source of new investment capital into Grayscale products this quarter was
slightly more weighted to offshore investors (55%), in-line with YE20.

FIGURE 17: GRAYSCALE INVESTOR PROFILE BY GEOGRAPHY 4Q20

4Q20 VS. YE20
YE20

55% 54%

45% 46%
©2021 Grayscale Investments, LLC

United States Offshore

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 14
Q4 | 2020

Conclusion

To quote Thomas Jefferson, “Paper money is liable to be abused, has been, is, and
Digital Asset forever will be abused, in every country in which it is permitted.” 2020 was the year
Investment institutional investors recognized that Bitcoin is a viable option for offsetting the
Report
abundance of paper money and the cumbersome nature of gold. In a world with over
$17 trillion of negative yielding debt, we believe Bitcoin will continue to become a
cornerstone of investors’ portfolios in 2021.

Bitcoin took center stage in the investment community, and Grayscale was fortunate
to be one of the main avenues for investment in 2020, with approximately $5.7 billion
in total inflows. We are proud to be one of the fastest growing asset managers in the
world, and continue to be grateful to investors for entrusting us with over $20 billion
worth of their investments in our products. We look forward to continuing to serve the
investment community as adoption of digital assets accelerates in 2021.
©2021 Grayscale Investments, LLC

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 15
Q4 | 2020

About Grayscale Investments®

Grayscale Investments is the world’s largest digital currency asset manager, with more
Digital Asset than $20.2B in assets under management as of December 31, 2020. Through its family
Investment of 9 investment products, Grayscale provides access and exposure to the digital
Report
currency asset class in the form of a traditional security without the challenges of buying,
storing, and safekeeping digital currencies directly. With a proven track record and
unrivaled experience, Grayscale’s products operate within existing regulatory
frameworks, creating secure and compliant exposure for investors.

For more information, please visit www.grayscale.co and follow @Grayscale.

©2021 Grayscale Investments, LLC

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 16
Q4 | 2020

Non-GAAP Measures

“Assets under management” (AUM), “inflows”, “total investment” and “average weekly
Digital Asset investment” are calculated using the Digital Asset Reference Rate for each Grayscale Product,
Investment which are not measures calculated in accordance with U.S. generally accepted accounting
Report
principles (“GAAP”). The net asset value of each Product determined on a GAAP basis is
referred to in this Report as “NAV.” Each Product’s digital assets are carried, for financial
statement purposes, at fair value, as required by GAAP.

Each Product determines the fair value of the digital assets it holds based on the price
provided by the applicable Digital Asset Exchange that the relevant Product considers its
principal market as of 4:00 p.m., New York time, on the valuation date. The cost basis of
investments in the applicable digital asset recorded by the applicable Product is the fair value
of such digital asset, as determined by such Product, at 4:00 p.m., New York time, on the
date of transfer to such Product by the Authorized Participant based on the creation Baskets.
The cost basis recorded by a Product may differ from proceeds collected by the Authorized
Participant from the sale of each Product’s Share to investors.

Each Product’s investment objective is for its Shares (based on digital assets per Share) to
reflect the value of the digital assets held by it, as determined by reference to the applicable
Digital Asset Reference Rate, less such Product’s expenses and other liabilities. There are two
types of Digital Asset Reference Rates used by the Products: (i) a volume-weighted average
price in U.S. dollars of the digital assets held by a Product for the immediately preceding 24-
hour period as of 4:00 p.m., New York time, on each business day (each, a “VWAP Price”) and
(ii) a volume-weighted index price calculated by applying a weighting algorithm to the price
and trading volume data of a digital asset for the immediately preceding 24-hour period as of
4:00 p.m., New York time (each, an “Index Price”), in each case as derived from data collected
from the Digital Asset Exchanges trading such digital asset selected by TradeBlock, Inc. (the
“Reference Rate Provider”). Grayscale believes that calculating the Digital Asset Reference
Rates in this manner mitigates the impact of anomalistic or manipulative trading that may
occur on any single digital asset exchange, and as such, provides a more reliable price for the
relevant digital asset.

Each Product’s AUM is calculated by multiplying such Product’s assets (other than U.S.
dollars or other fiat currency), less expenses and other liabilities, by the relevant Digital Asset
Reference Rate, and as a result, it is not calculated in accordance with GAAP. Investments
are calculated by multiplying the number of digital assets received each day as part of the
creation process by that day’s Index Price. Total investment amounts reflect total capital
raised using this non-GAAP methodology during the periods presented in the report. Average
weekly investments reflect the average of the capital amounts raised using this non-GAAP
methodology over the number of weeks in those respective periods.
©2021 Grayscale Investments, LLC

The following tables show the Grayscale Bitcoin Trust’s and Grayscale Ethereum Trust’s total
investments and average weekly investments using the GAAP cost basis of such investments
during the periods shown below as well as the price of Bitcoin and Ethereum on Grayscale
Bitcoin Trust’s and Grayscale Ethereum Trust’s principal market, the Digital Asset Reference
Rate used by the Trusts and the Grayscale Bitcoin Trust’s and Grayscale Ethereum Trust’s AUM
using the principal market price and Digital Asset Reference Rate.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 17
Q4 | 2020

GRAYSCALE® BITCOIN TRUST

Grayscale For the Quarter Ended Trailing 12-Month

Bitcoin Trust
(in millions) 3/31/2020 6/30/2020 9/30/2020 12/31/2020 12/31/2020
Digital Asset
Investment
Report Total
$389.4 $757.4 $723.9 $2,876.6 $4,747.3
Investment

Average Weekly
$30.0 $58.3 $55.7 $221.3 $91.3
Investment

(AUM For the Quarter Ended

denominated
in millions) 3/31/2020 6/30/2020 9/30/2020 12/31/2020

Price of Bitcoin on
$6,474.2 $9,134.1 $10,708.6 $29,185.1
principal market

AUM using principal

$1,972.2 $3,532.4 $4,816.6 $17,716.5
market price

Digital Asset
$6,466.5 $9,156.3 $10,748.5 $28,788.6
Reference Rate

AUM using Digital

$1,969.9 $3,540.9 $4,834.6 $17,475.8
Asset Reference Rate

GRAYSCALE® ETHEREUM TRUST

Grayscale For the Quarter Ended Trailing 12-Month

Ethereum Trust
(in millions) 3/31/2020 6/30/2020 9/30/2020 12/31/2020 12/31/2020

Total
$108.2 $135.1 $204.1 $338.9 $786.3
Investment

Average Weekly
$8.3 $10.4 $15.7 $26.1 $15.1
Investment

(AUM For the Quarter Ended

denominated
in millions) 3/31/2020 6/30/2020 9/30/2020 12/31/2020

Price of Ethereum on
$133.6 $225.0 $355.3 $745.0
principal market

AUM using principal

$142.1 $382.8 $804.0 $2,188.1
market price
©2021 Grayscale Investments, LLC

Digital Asset
$133.0 $226.6 $356.3 $740.8
Reference Rate

AUM using Digital

$141.5 $385.6 $806.2 $2,175.7
Asset Reference Rate

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 18
Q4 | 2020

Important Disclosures & Other Information

©Grayscale Investments, LLC. All content is original and has been researched and produced by
Digital Asset
Grayscale Investments, LLC (“Grayscale”) unless otherwise stated herein. No part of this content may
Investment be reproduced in any form, or referred to in any other publication, without the express consent of
Report Grayscale.

This report is for informational purposes only and does not constitute an offer to sell or the solicitation
of an offer to sell or buy any security in any jurisdiction where such an offer or solicitation would be
illegal. There is not enough information contained in this report to make an investment decision and
any information contained herein should not be used as a basis for this purpose. This report does
not constitute a recommendation or take into account the particular investment objectives, financial
situations, or needs of investors. Investors are not to construe the contents of this report as legal, tax
or investment advice, and should consult their own advisors concerning an investment in digital assets.
The price and value of assets referred to in this research and the income from them may fluctuate. Past
performance is not indicative of the future performance of any assets referred to herein. Fluctuations
in exchange rates could have adverse effects on the value or price of, or income derived from, certain
investments.

Investors should be aware that Grayscale is the sponsor of Grayscale Bitcoin Trust (BTC), Grayscale
Bitcoin Cash Trust (BCH), Grayscale Ethereum Trust (ETH), Grayscale Ethereum Classic Trust (ETC),
Grayscale Litecoin Trust (LTC), Grayscale Horizen Trust (ZEN), Grayscale Stellar Lumens Trust (XLM), and
Grayscale Zcash Trust (ZEC) (each, a “Trust”) and the manager of Grayscale Digital Large Cap Fund LLC
(the “Fund”). The Trusts and the Fund are collectively referred to herein as the “Products”. Any Product
currently offering Share creations is referred to herein as an “Offered Product”. Information provided
about an Offered Product is not intended to be, nor should it be construed or used as investment, tax
or legal advice, and prospective investors should consult their own advisors concerning an investment
in such Offered Product. This report does not constitute an offer to sell or the solicitation of an offer
to buy interests in any of the Products. Any offer or solicitation of an investment in a Product may be
made only by delivery of such Product’s confidential offering documents (the “Offering Documents”) to
qualified accredited investors (as defined under Rule 501(a) of Regulation D of the U.S. Securities Act of
1933, as amended), which contain material information not contained herein and which supersede the
information provided herein in its entirety.

The Products are not subject to the same regulatory requirements as exchange traded funds or mutual
funds, including the requirement to provide certain periodic and standardized pricing and valuation
information to investors. The Products are not registered with the Securities and Exchange Commission
(the “SEC”) (except for Grayscale Bitcoin Trust (BTC) and Grayscale Ethereum Trust (ETH)), any state
securities laws, or the U.S. Investment Company Act of 1940, as amended. There are substantial risks in
investing in one or more Products. Any interests in each Product described herein have not been
recommended by any U.S. federal or state, or non-U.S., securities commission or regulatory authority,
including the SEC. Furthermore, the foregoing authorities have not confirmed the accuracy or
determined the adequacy of this document. Any representation to the contrary is a criminal offense.

Certain of the statements contained herein may be statements of future expectations and other
forward-looking statements that are based on Grayscale’s views and assumptions and involve known
and unknown risks and uncertainties that could cause actual results, performance or events to differ
materially from those expressed or implied in such statements. In addition to statements that are
©2021 Grayscale Investments, LLC

forward-looking by reason of context, the words “may, will, should, could, can, expects, plans, intends,
anticipates, believes, estimates, predicts, potential, projected, or continue” and similar expressions
identify forward-looking statements. Grayscale assumes no obligation to update any forward-looking
statements contained herein and you should not place undue reliance on such statements, which speak
only as of the date hereof. Although Grayscale has taken reasonable care to ensure that the information
contained herein is accurate, no representation or warranty (including liability towards third parties),
expressed or implied, is made by Grayscale as to its accuracy, reliability or completeness. You should
not make any investment decisions based on these estimates and forward-looking statements.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 19
Q4 | 2020

Note On Hypothetical Simulated Performance Results

HYPOTHETICAL SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS.

There is no guarantee that the market conditions during the past period will be present in the future.
Rather, it is most likely that the future market conditions will differ significantly from those of this past
Digital Asset period, which could have a materially adverse impact on future returns. Unlike an actual performance
Investment record, simulated results do not represent actual trading or the costs of managing the portfolio. Also,
Report since the trades have not actually been executed, the results may have under or over compensated for
the impact, if any, of certain market factors, such as lack of liquidity.

Simulated trading programs in general are also subject to the fact that they are designed with the
benefit of hindsight. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY
TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS.

The hypothetical simulated performance results are based on a model that used inputs that are based
on assumptions about a variety of conditions and events and provides hypothetical not actual results.
As with all mathematical models, results may vary significantly depending upon the value of the
inputs given, so that a relatively minor modification of any assumption may have a significant impact
on the result. Among other things, the hypothetical simulated performance calculations do not take
into account all aspects of the applicable asset’s characteristics under certain conditions, including
characteristics that can have a significant impact on the results. Further, in evaluating the hypothetical
simulated performance results herein, each prospective investor should understand that not all of the
hypothetical assumptions used in the model are described herein, and conditions and events that are
not accounted for by the model may have a significant adverse effect on the performance of the assets
described herein. Prospective investors should consider whether the behavior of these assets should
be tested based on different and/or additional assumptions from those included in the information
herein.

IN ADDITION TO OTHER DIFFERENCES, PROSPECTIVE INVESTORS IN A PRODUCT SHOULD

NOTE THE FOLLOWING POTENTIALLY SIGNIFICANT DIFFERENCES BETWEEN THE ASSUMPTIONS
MADE IN THE HYPOTHETICAL SIMULATED PERFORMANCE RESULTS INCLUDED HEREIN AND THE
CONDITIONS UNDER WHICH A PRODUCT WILL PERFORM, WHICH COULD CAUSE THE ACTUAL
RETURN OF SUCH PRODUCT TO DIFFER CONSIDERABLY FROM RETURNS SET FORTH BY THE
HYPOTHETICAL SIMULATED PERFORMANCE, TO BE MATERIALLY LOWER THAN THE RETURNS AND
TO RESULT IN LOSSES OF SOME OR ALL OF THE INVESTMENT BY PROSPECTIVE INVESTORS:

FOR EXAMPLE, EACH TRUST WILL HOLD ONLY ONE DIGITAL ASSET, WHEREAS THE HYPOTHETICAL
SIMULATED PERFORMANCE RESULTS ARE INTENDED TO SHOW HYPOTHETICAL PERFORMANCE
OF AN INVESTMENT MULTIPLE DIGITAL ASSETS. IN ADDITION, THE GENERAL MARKET DATA USED
IN THE HYPOTHETICAL SIMULATED PERFORMANCE RESULTS DO NOT REFLECT ACTUAL TRADING
ACTIVITY AND COULD NOT BE REPLICATED BY A PRODUCT IN ITS ACTUAL TRANSACTIONS. If actual
trading activity was executed at levels that differed significantly from the general market data used in
the hypothetical simulated performance, the actual returns achieved would have varied considerably
from the results of the hypothetical simulated performances and could have been substantially lower
and could result in significant losses.

IN ADDITION, THE HYPOTHETICAL SIMULATED PERFORMANCE RESULTS DO NOT ASSUME ANY

GAINS OR LOSSES FROM TRADING AND THEREFORE DO NOT REFLECT THE POTENTIAL LOSSES,
COSTS AND RISKS POSED BY TRADING AND HOLDING ACTUAL ASSETS.
©2021 Grayscale Investments, LLC

The hypothetical simulated performance results do not reflect the impact the market conditions may
have had upon a Product were it in existence during the historical period selected. The hypothetical
simulated performance results do not reflect any fees incurred by a Product. If such amounts had been
included in the hypothetical simulated performance, the results would have been lowered.

AS A RESULT OF THESE AND OTHER DIFFERENCES, THE ACTUAL RETURNS OF A PRODUCT MAY
BE HIGHER OR LOWER THAN THE RETURNS SET FORTH IN THE HYPOTHETICAL SIMULATED
PERFORMANCE RESULTS, WHICH ARE HYPOTHETICAL AND MAY NEVER BE ACHIEVED.
Reasons for a deviation may also include, but are by no means limited to, changes in regulatory and/or
tax law, generally unfavorable market conditions and the Risk Factors set forth below.

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 20
Q4 | 2020

Certain Risk Factors

Each Product is a private, unregistered investment vehicle and not subject to the same regulatory
requirements as exchange traded funds or mutual funds, including the requirement to provide certain
periodic and standardized pricing and valuation information to investors. There are substantial risks in
Digital Asset investing in a Product or in digital assets directly, including but not limited to:
Investment
Report • PRICE VOLATILITY
Digital assets have historically experienced significant intraday and long-term price swings. In
addition, none of the Products currently operates a redemption program and may halt creations
from time to time. There can be no assurance that the value of the common units of fractional
undivided beneficial interest (“Shares”) of any Product will approximate the value of the digital
assets held by such Product and such Shares may trade at a substantial premium over or discount
to the value of the digital assets held by such Product. At this time, none of the Products is
operating a redemption program and therefore Shares are not redeemable by any Product.
Subject to receipt of regulatory approval from the SEC and approval by Grayscale, in its sole
discretion, any Product may in the future operate a redemption program. Because none of the
Products believes that the SEC would, at this time, entertain an application for the waiver of rules
needed in order to operate an ongoing redemption program, none of the Products currently has
any intention of seeking regulatory approval from the SEC to operate an ongoing redemption
program.

• MARKET ADOPTION
It is possible that digital assets generally or any digital asset in particular will never be broadly
adopted by either the retail or commercial marketplace, in which case, one or more digital assets
may lose most, if not all, of its value.

• GOVERNMENT REGULATION
The regulatory framework of digital assets remains unclear and application of existing regulations
and/or future restrictions by federal and state authorities may have a significant impact on the
value of digital assets.

• SECURITY
While each Product has implemented security measures for the safe storage of its digital assets,
there have been significant incidents of digital asset theft and digital assets remains a potential
target for hackers. Digital assets that are lost or stolen cannot be replaced, as transactions are
irrevocable.

• TAX TREATMENT OF VIRTUAL CURRENCY

For U.S. federal income tax purposes, Digital Large Cap Fund will be a passive foreign investment
company (a “PFIC”) and, in certain circumstances, may be a controlled foreign corporation
(a “CFC”). Digital Large Cap Fund will make available a PFIC Annual Information Statement
that will include information required to permit each eligible shareholder to make a “qualified
electing fund” election (a “QEF Election”) with respect to Digital Large Cap Fund. Each of the
other Products intends to take the position that it is a grantor trust for U.S. federal income tax
purposes. Assuming that a Product is properly treated as a grantor trust, Shareholders of that
Product generally will be treated as if they directly owned their respective pro rata shares of the
underlying assets held in the Product, directly received their respective pro rata shares
of the Product’s income and directly incurred their respective pro rata shares of the Product
’s expenses. Most state and local tax authorities follow U.S. income tax rules in this regard.
©2021 Grayscale Investments, LLC

Prospective investors should discuss the tax consequences of an investment in a Product with
their tax advisors.

• NO SHAREHOLDER CONTROL
Grayscale, as sponsor of each Trust and the manager of the Fund, has total authority over the
Trusts and the Fund and shareholders’ rights are extremely limited.

• LACK OF LIQUIDITY AND TRANSFER RESTRICTIONS

An investment in a Product will be illiquid and there will be significant restrictions on transferring
interests in such Product. The Products are not registered with the SEC, any state securities laws,
or the U.S. Investment Company Act of 1940, as amended, and the Shares of each Product are

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 21
Q4 | 2020

being offered in a private placement pursuant to Rule 506(c) under Regulation D of the Securities
Act of 1933, as amended (the “Securities Act”). As a result, the Shares of each Product are
restricted Shares and are subject to a one-year holding period in accordance with Rule 144 under
the Securities Act. In addition, none of the Products currently operates a redemption program.
Because of the one-year holding period and the lack of an ongoing redemption program,
Digital Asset Shares should not be purchased by any investor who is not willing and able to bear the risk of
Investment investment and lack of liquidity for at least one year. No assurances are given that after the one
Report year holding period, there will be any market for the resale of Shares of any Product, or, if there is
such a market, as to the price at such Shares may be sold into such a market.

• POTENTIAL RELIANCE ON THIRD-PARTY MANAGEMENT; CONFLICTS OF INTEREST

Products and their sponsors or managers and advisors may rely on the trading expertise and
experience of third-party sponsors, managers or advisors, the identity of which may not be fully
disclosed to investors. The Products and their sponsors or managers and advisors and agents
may be subject to various conflicts of interest.

• FEES AND EXPENSES

Each Product’s fees and expenses (which may be substantial regardless of any returns on
investment) will offset each Product’s trading profits.

Additional General Disclosures

Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an
investment. This document is intended for those with an in-depth understanding of the high risk nature
of investments in digital assets and these investments may not be suitable for you. This document may
not be distributed in either excerpts or in its entirety beyond its intended audience and the Products and
Grayscale will not be held responsible if this document is used or is distributed beyond its initial recipient
or if it is used for any unintended purpose.

The Products and Grayscale do not: make recommendations to purchase or sell specific securities;
provide investment advisory services; or conduct a general retail business. None of the Products or
Grayscale, its affiliates, nor any of its directors, officers, employees or agents shall have any liability,
howsoever arising, for any error or incompleteness of fact or opinion in it or lack of care in its preparation
or publication, provided that this shall not exclude liability to the extent that this is impermissible under
applicable securities laws.

The logos, graphics, icons, trademarks, service marks and headers for each Product and Grayscale
appearing herein are service marks, trademarks (whether registered or not) and/or trade dress of
Grayscale Investments, LLC. (the “Marks”). All other trademarks, company names, logos, service marks
and/or trade dress mentioned, displayed, cited or otherwise indicated herein (“Third Party Marks”) are
the sole property of their respective owners. The Marks or the Third Party Marks may not be copied,
downloaded, displayed, used as metatags, misused, or otherwise exploited in any manner without the
prior express written permission of the relevant Product and Grayscale or the owner of such Third Party
Mark.

The above summary is not a complete list of the risks and other important disclosures involved in
investing in any Product or digital assets and is subject to the more complete disclosures contained in
each Product’s Offering Documents, which must be reviewed carefully.
©2021 Grayscale Investments, LLC

The Products are distributed by Genesis Global Trading, Inc. (Member FINRA/SIPC, MSRB Registered).

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 22
Q4 | 2020

Digital Asset
Investment
Report

General Inquiries:

[email protected]
Address: 250 Park Ave S 5th floor, New York, NY 10003
Phone: (212) 668-1427
@Grayscale
©2021 Grayscale Investments, LLC

PLEASE REVIEW IMPORTANT DISCLOSURES & OTHER INFORMATION AT THE END OF THIS REPORT. 23