Grayscale Rebalances Digital Large Cap Fund, Boosts Bitcoin and Ethereum Allocations

In a significant move, Grayscale Investments has rebalanced its Digital Large Cap Fund, increasing the combined allocation of Bitcoin and Ethereum to 90%. This strategic shift reflects the fund’s quarterly rebalancing, which follows the CoinDesk Large Cap Select Index methodology. As of Q4 2024, Bitcoin now accounts for 73.52% of the portfolio, while Ethereum holds 16.16%.

Whales Accumulate Bitcoin

The increased allocation to Bitcoin and Ethereum is a testament to the growing confidence in these two leading cryptocurrencies. With Bitcoin’s dominance in the market, it’s no surprise that Grayscale has chosen to increase its allocation. This move is likely to be seen as a vote of confidence in Bitcoin’s long-term potential, and may encourage other investors to follow suit.

Cardano Added to the Fund

In a notable addition, Cardano has been included in the Digital Large Cap Fund with a 1.44% allocation. This move comes on the heels of Cardano’s impressive 75% price increase over the past year. The addition of Cardano reflects Grayscale’s commitment to diversifying its portfolio and responding to market trends.

Avalanche Removed, XRP and Solana Maintain Positions

Avalanche, on the other hand, has been removed from the fund due to its weaker performance over the past year. XRP and Solana, however, maintain their positions with 5.05% and 3.83% allocations, respectively. These changes demonstrate Grayscale’s willingness to adapt to market conditions and adjust its portfolio accordingly.

Rebalancing Extends to Other Grayscale Products

The rebalancing effort extends beyond the Digital Large Cap Fund, with several other Grayscale products also undergoing changes. The Decentralized AI Fund has added Livepeer with a 2.83% weighting, while the Decentralized Finance Fund has introduced Curve at 6.71%, replacing Synthetix. Additionally, the Smart Contract Platform Ex-Ethereum Fund has added Sui with a 7.93% allocation.

Regulatory Approval and ETF Expectations

Grayscale is currently seeking regulatory approval to convert its large cap fund and other products into exchange-traded funds (ETFs). With Gary Gensler stepping down as SEC Chair and Paul Atkins taking over, many are anticipating more crypto-friendly policies. This shift has sparked expectations for new ETFs, including Solana, XRP, Litecoin, and HBAR. If these products gain regulatory acceptance, Grayscale may potentially secure ETF approval for its large cap fund.

Conclusion

Grayscale’s rebalancing of its Digital Large Cap Fund reflects the company’s commitment to adapting to market trends and diversifying its portfolio. The increased allocation to Bitcoin and Ethereum, combined with the addition of Cardano, demonstrates Grayscale’s confidence in these leading cryptocurrencies. As the regulatory landscape continues to evolve, Grayscale’s efforts to secure ETF approval may pay off, paving the way for new investment opportunities in the crypto space.

Source: Cryptobriefing.com

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