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BTCS Inc. (OTCQB: BTCS) — A publicly-traded cryptocurrency and blockchain company — has seen its total crypto asset under management (AUM) cross the $1 million milestone. The landmark achievement comes after crypto prices generally recovered from the mid-March slump (Black Thursday). BTCS shares are up more than 215% year-to-date.
Reports indicate that Bitcoin-focused crypto hedge funds are outperforming their more-traditional counterparts. BTCS plans to pursue a measured approach to diversifying its current cryptocurrency holdings.
BTCS Crypto AUM Crosses $1M
BTCS’ $1M Q2 2020 AUM constituted a 285% increase from its Q1 2020 AUM of $264K. The company revealed that the growth experienced in the second quarter of 2020 was primarily due to additional purchases of Bitcoin (BTC) and Ethereum (ETH). BTCS increased its Bitcoin and Ethereum stake by 33.7 BTC and 1,319 ETH respectively.
Bitcoin price gained over 40% in Q2 2020 as the largest crypto by market capitalization recovered from its Black Thursday decline. On March 12, 2020, Bitcoin “flash crashed” to $3,867 as fears over the COVID-19 pandemic caused a cascade of panic selling across both the cryptocurrency and broader financial market.
Bitcoin is up more than 136% since Black Thursday with BTCS identifying BTC as a haven asset in times of economic uncertainty. According to the company, both Bitcoin and Ethereum are great stores of value especially against currency debasement with central banks embarking on extensive quantitative easing.
Ethereum also recovered from its Black Thursday slump but is still below its 2020 high of $284 achieved back in mid-February. Expectations over ETH 2.0 and the increasing popularity of decentralized finance (DeFi) is seeing the second-ranked crypto by market capitalization continue to enjoy positive price performance.
Over the past few weeks, the hype surrounding liquidity mining on ETH-based DeFi protocols like Compound and Balancer has seen the total value locked in the market surge above $1.8B.
Plans for Portfolio Diversification
Apart from Bitcoin and Ethereum, BTCS also plans to expand its crypto holdings to cover other altcoins. According to the company, the plan is part of efforts to ensure BTCS shareholders have indirect exposure to a variety of digital assets. However, BTCS says it will avoid tokens which may be deemed to be digital securities by regulators, and will instead look towards taking up investment positions in key protocol layer digital assets.
The U.S. Securities and Exchange Commission (SEC) has continued to maintain its stance that most initial coin offering (ICO) tokens are securities. Indeed, several ICO projects have come under investigation by the SEC with many forced to pay millions in fines.
The digital asset firm is also reportedly developing its own in-house consumer-facing digital asset data analytics platform. With the crypto space still in its infancy, price benchmarks, indices, trading volume, and other important metrics are still being refined.