Grayscale Plans to Launch a Cryptocurrency ‘Large Cap Fund’

This Wednesday Grayscale Investments, the sponsor of the Bitcoin Trust (OTCQX: GBTC) has announced a new cryptocurrency investment vehicle is coming. The company plans to launch the ‘Grayscale Digital Large Cap Fund’ (the “Fund”) that intends to hold the top digital assets within the cryptocurrency economy.

Grayscale Launches a New Cryptocurrency Fund

The managers of the popular bitcoin investment fund GBTC and the ethereum trust, Grayscale, have decided to create a much larger investment product comprised of a basket of top-performing cryptocurrencies. According to Grayscale’s announcement, the basket will consist of litecoin (LTC) bitcoin cash (BCH) ripple (XRP) bitcoin core (BTC), and ethereum (ETH) for now.

“We’re excited to further expand the universe of Grayscale’s product offerings as interest in the digital currency asset class continues to grow,” said Barry Silbert, CEO, and founder of Grayscale Investments.

As a trusted and experienced manager, Grayscale is committed to creating investment structures that are familiar to qualified investors and provide secure access to this emerging asset class.

The Fund Targets 70% Coverage of the Digital Asset Market

The sponsors first funds consisting of ETH and BTC have done phenomenally well following alongside the prices rises of spot markets. When Grayscale launched its first product back in 2013 at the time BTC was averaging $127 per coin and GBTC became one of the first mainstream investment vehicles tied to bitcoin reserves. In July of 2017, the firm initiated its ethereum trust which is framed in a similar fashion. For the new ‘Grayscale Digital Large Cap Fund’ the sponsor may also hold cash and assets that arise from forks and airdrops. Shares will reflect the platform Tradeblock’s Digital Asset Reference Rate at 4 pm EDT.

“Through a rules-based portfolio construction process, the Fund targets 70% coverage of the digital asset market — The Fund will be rebalanced on a quarterly basis to remove existing digital assets or include new digital assets in the Fund’s portfolio in accordance with certain criteria established by Grayscale,” explains the announcement.

One Year of Holding and Risk

According to Grayscale the Fund is a Cayman Islands limited liability company but based in the United States. The product is also not registered with the U.S. Securities and Exchange Commission (SEC), and is not subject to American based securities laws.

Moreover, Grayscale details that the investment product is “highly speculative in nature,” and the Fund is subject to a one-year holding period. This means investors have to “bear the risks” for an entire year, but after the holding period assets can be “resold without restriction,” Grayscale concludes.

Leave a Reply

Your email address will not be published. Required fields are marked *