Digital currency manager Grayscale took in $607 million of investments in 2019, an amount that outstripped its collective inflows of the previous five years.
The announcement on Thursday is noteworthy given that cryptocurrency prices slumped for much of 2019, and remain far off their highs in late 2017, when Bitcoin touched $20,000. It’s now at around $9,000.
According to Grayscale’s managing director, Michael Sonnenshein, the firm’s banner year reflects a growing belief on the part of hedge funds and other institutional investors that Bitcoin and other cryptocurrencies are here to stay.
“Investors are really glomming on to this notion that this is a bona fide asset class, and it’s not going away and that they can’t not pay attention to it,” he said.
Sonnenshein also pointed to recent data from Charles Schwab that indicates Bitcoin is the fifth most popular individual asset in the portfolio of millennial investors, ahead of stock in Disney and Netflix.
For Grayscale, the world’s largest crypto management firm, all of this is evidence of a generational shift in investing strategies, including that younger people consider assets like Bitcoin to be a safe haven. The firm also predicts capital flow into crypto will accelerate as older people die, and their heirs move their inheritance out of gold and into cryptocurrency.
Grayscale’s thesis is a novel one, however, and has yet to be validated by the broader investment community. Meanwhile, it’s also unclear how much appetite investors have for cryptocurrencies other than Bitcoin. In its report describing 2019 investment patterns, Grayscale noted that only 14% of inflows in its last quarter went to other types of crypto—primarily Ethereum.
Grayscale occupies a privileged position in the crypto market at a time when the SEC has effectively shut the door on cryptocurrency ETFs. While it doesn’t offer a crypto ETF, the firm sells shares in a collection of trusts that hold Bitcoin and other cryptocurrencies—a legal mechanism that allows institutional investors to gain exposure to crypto.
Grayscale’s Bitcoin Trust is also in the process of becoming a so-called “SEC reporting company,” which would require it to file paperwork such as quarterly and annual reports with the Securities and Exchange Commission, similar to publicly-traded companies. The firm hopes the new status, which it expects to obtain in coming months, will help it attract investments from pension funds and other conservative investors.
Sonnenshein expects the crypto market to expand in 2020, driven in part by the growing availability of derivative products like options and futures.
Grayscale’s report comes as Bitcoin is enjoying a mini-boom to start the new year. Its price is up 20% since January 1, its best new year’s rally since 2012.
More must-read stories from Fortune:
—Greenpeace ranks China’s tech giants on renewable energy
—Sex tech steals the spotlight at CES
—Why there are so many scooters in Los Angeles
—What a $1,000 investment in 10 top stocks a decade ago would be worth today
—Best of CES 2020? Tech sites’ opinions differ wildly
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.
