Grayscale’s Latest Cardano Purchase Makes it Its Third-largest Cryptocurrency Holding
Grayscale has topped its cryptocurrency holdings in a recent purchase, where it added Cardano (ADA), making it the third-largest holding in its cryptocurrency Fund. The leading asset management firm offloaded some of its cryptocurrency assets to purchase Cardano. Currently, Cardano represents 4.26% of the firm’s total cryptocurrency portfolio following Bitcoin and Ethereum which represent 67% and 25%, respectively.
According to Grayscale, following the Cardano purchase, it hopes to acquire cryptocurrency assets that represent 70% of the entire cryptocurrency market. With the recent acquisition, it is looking to diversify its portfolio. The asset management firm also holds portions of other cryptocurrencies such as Bitcoin Cash (BCH), Litecoin (LTC) and ChainLink (LINK) in its digital currency Fund. Grayscale commented on the opportunities cryptocurrencies present to traditional investors. As such, it has provided its clients with a low-risk access to the assets such that they can invest without having to worry about volatility or safe storage.
Grayscale Considers Trusts on DeFi Tokens
Earlier in January, Grayscale said it was considering making foray into the decentralized Finance space and setting up Trusts for tokens in the space- Polkadot (DOT), Cosmos (ATOM) and Aave. Privacy-themed Monero was part of Grayscale’s cryptocurrency bucket list. However, despite its interest, there is no indication that the firm went through with its plans as these tokens will fall under micro cap Fund in contrast to its Macro Fund. Late last year, Grayscale filed for trusts on Tezos, Livepeer, DecentraLand and a few others. It was during that period that it also applied for a trust on Cardano, and now the firm has opened the floodgates for more investments on the asset with the latest purchase.
Bitcoin Remains Largest cryptocurrency Fund for Grayscale
By far, Bitcoin remains the largest cryptocurrency holding of the firm. Its Bitcoin Trust (GBTC) has received more investments than any other trusts. Institutional investors have joined the fray as well. As of January, Grayscale’s Bitcoin Trust added over $1 billion within a week. It was also reported that its BTC trust accounted for a little over 3% of the 18 million total supply of the leading cryptocurrency. The report put the total amount of Bitcoins held by Grayscale at almost 640,000.
Expert analysts from JPMorgan Chase & co. have highlighted the pivotal role Grayscale’s Bitcoin Trust plays in the price of Bitcoin and by extension, other cryptocurrencies. In light of this, the analysts expressed concerns for the fate of the cryptocurrency market as GBTC unlocking is due to take place later this month. According to them, a selling pressure from investors might follow after the unlocking, thereby leading to a further crash in the market. A crash would likely take the price of Bitcoin to $25k, experts opined. However, a bullish trend is expected after that. Grayscale dissolved its XRP trust in December 2020 following a lawsuit between Ripple’s founders and the US SEC.
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