TL;DR
- Grayscale conducts quarterly adjustment in funds, removing ADA and ATOM from its portfolio.
- Proceeds from the sales are reinvested to maintain a balanced and diversified portfolio.
- The removal of ADA and ATOM is based on negative returns and other selection criteria.
Grayscale, one of the world’s leading digital asset management firms, has carried out a quarterly adjustment in two of its funds. It has decided to remove Cardano (ADA) and Cosmos (ATOM) from its portfolio. This initiative is part of a regular portfolio rebalancing process aimed at maintaining diversification and optimizing fund performance.
In the case of the Grayscale Digital Large Cap Fund (GDLC), the ADA token from Cardano has been removed, while in the Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE), the ATOM token from Cosmos has been eliminated. The funds generated from the sale of these assets are reinvested in existing fund components, helping to maintain a balanced and diversified portfolio.
At the end of the day on 4/3/2024, Grayscale Digital Large Cap Fund’s Fund Components were a basket of the following assets and weightings. As a result of the rebalancing, Cardano $ADA has been removed. https://t.co/o5jJz3NKs0$BTC $ETH $SOL $XRP $AVAX (3/6) pic.twitter.com/qVymu05BKw
— Grayscale (@Grayscale) April 4, 2024
The final decision to remove ADA and ATOM from Grayscale’s funds is based on various factors, including the performance of these coins in the market. Both have recorded negative performance so far this year, with ADA falling by 8.1% and ATOM by more than 3.3%. This significant drop in performance, along with other selection criteria, influenced the decision to adjust the funds’ portfolios.
Grayscale Refines its Investments Seeking More Profits
Once the rebalancing has been completed, the funds experienced changes in their composition. For example, the GDLC now has a higher weighting in Bitcoin (BTC), representing 70.96% of the portfolio, followed by Ether (ETH) with 21.84%. On the other hand, the GSCPxE now has a higher concentration in Solana (SOL), with 58.41% of the portfolio, followed by Cardano (ADA) with 14.56%.
Additionally, the firm has also launched a new crypto investment fund called the Grayscale Dynamic Income Fund. This fund is designed for high-net-worth investors and offers the opportunity to access cryptocurrencies with staking rewards.
Grayscale performs a tune-up for its investment machinery. With the quarterly fund adjustment, the firm reflects its commitment to active portfolio management, seeking the highest returns for its clients and hunting for investment opportunities that generate value. The removal of ADA and ATOM, along with other changes in the funds’ composition, is part of this process of optimization and constant adjustment to adapt to market conditions and maximize investment performance.
