- Stone Ridge, a New York-based investment firm, has revealed it is holding ₿10,000 for clients
- The company built their own trading and custody suite through which it buys and holds Bitcoin for clients
- Stone Ridge’s Bitcoin venture illustrates investor appetite for the cryptocurrency
Another corporate entity has emerged as a big holder of Bitcoin as the pattern of enterprise-level portfolio diversification into the cryptocurrency continues. This time it is the turn of Stone Ridge Asset Management, a New York-based firm with $13.4 billion assets under management, who revealed in a Forbes article yesterday how they have acquired ₿10,000, currently worth $114 million after high client demand. The news comes in the wake of MicroStrategy and Square investing hugely in Bitcoin in recent weeks as a hedge against cash and traditional assets.
Stone Ridge Takes the Scenic Route to Bitcoin Ownership
The Stone Ridge story isn’t simply one of a company buying a ton of Bitcoin, but also about how they did it. In mid 2017, Stone Ridge clients discovered that that senior employees and company advisors were buying so much Bitcoin that it needed to be included in audits. Clients got wind of this and expressed an interest in buying Bitcoin themselves, figuring that the staff must know something they didn’t.
Rather than simply going out and buying ₿10,000 over the counter, Stone Ridge took the scenic route – they created an entire raft of trade execution and custody tools themselves and started an entirely new revenue stream in the process. By October 2017 this had been formalized into the New York Digital Investment Group (NYDIG), an offshoot which executed cryptocurrency purchases and held on to the assets for their customers.
NYDIG Illustrates Bitcoin Demand
Having obtained a New York BitLicense and New York State limited-purpose trust charter, NYDIG is now the legal custodian of $115 million worth of Bitcoin on behalf of their customers, a custody service that is also used by the likes of Ripple chairman Chris Larsen who last month revealed that he had moved the contents of one of his sizeable XRP wallets over to NYDIG.
The Stone Ridge story may not have the same impact as, say, a MicroStrategy swapping $400 million for Bitcoin, but is reflects the growing appetite for Bitcoin among their clients, which is an equally powerful narrative that illustrates that the $6.9 billion worth of BTC being held by public companies is likely an underestimation.