Grayscale Plans To Launch New Cryptocurrency Funds
Grayscale, the company that launched the first tradeable Bitcoin Investment Trust back in 2013, has revealed that it is about to launch four new cryptocurrency-based investment funds.
Notably, Grayscale was founded in 2013 and was established by the Digital Currency Group, a financial organization that makes investments in digital currency-related financial endeavors. The company also launched the first ever bitcoin-related hedge fund, with the GBTC ticker, back in 2013.
Moreover, Grayscale believes in the success of cryptocurrencies and their potential to disrupt financial markets. The company wrote on its web page:
“Digital currencies are poised to radically transform our financial system, but it won’t happen overnight. At Grayscale Investments, we believe investors deserve an established, trusted, and accountable partner that can help them navigate the grey areas of digital currency investing. That’s why we are building transparent, familiar investment products that facilitate access to this burgeoning asset class and provide the springboard to invest in the new digital currency-powered internet of money.”
With the rising popularity of digital currencies, Grayscale has decided to launch four new hedge funds, linked to four other major cryptocurrencies. The four new crypto-funds are: the Ethereum Investment Trust, Bitcoin Cash Investment Trust, Litecoin Investment Trust, and XRP Investment Trust. As expected, the funds will be focused around each of the virtual currencies with which they are associated. Additionally. Grayscale announced that it’s planning to establish and launch several more similar related funds this year.
In an interview with CNBC, the managing director at Grayscale Investments, Michael Sonnenshein, said:
“It is our belief that digital currencies as an asset class has not only arrived but are here to stay. Consequently, we are committed to providing investors with structures that enable them to participate in this exciting asset class.”
Grayscale Investment methodology
Grayscale’s four new crypto funds operate as trusts that follow a rule-based methodology, which focuses mainly on the liquidity of the cryptocurrencies. Every quarter, the company makes an analysis of certain cryptocurrencies and checks if the currency in question has retracted to a 70 percent target of the overall market cap. This technique helps in determining the overall liquidity the asset has, according to Grayscale.
Given that the funds are operated as trusts, the only investments allowed are from U.S.-based, qualified, and verified investors. There’s also a mandatory one-year holding period for all investors. Furthermore, investors will be required to hold these funds for more than a year, before they can sell their holdings without any restriction.
These four new trusts will be added to a multi-crypto investment fund, called the Digital Large Cap Fund, launched by the company last month. While Digital Large Cap Fund provides an investment option for a suite of cryptocurrencies, each of the four trusts will specifically focus on its individual crypto-asset.
With this move, Grayscale is trying to expand its customer base worldwide by offering “Wall Street Traders” the chance of indirectly investing in various cryptocurrencies without having to get involved with the digital asset itself.