Hi, this is an article from one of my private students and fellow crypto “buff” 🙂 Jonah from New York:
A few days ago, Grayscale Investments announced that after considering other cryptocurrencies for their fund, they have decided to add Cardano (ADA) to their large-cap fund.
Grayscale Investments is the world’s largest digital currency asset manager with over $40 billion in assets under management. They believe that digital currencies will cause a meaningful generational shift in how individuals approach investing, and they want to expose these individuals to the digital asset market through their investing strategies.
They are a subsidiary of the Digital Currency Group, which also owns CoinDesk; the cryptocurrency news and digital media company.
Grayscale offers investors 14 different investment products and one of those products is their large-cap fund. Their large-cap fund manages over $370 million and is made up of large-cap coins that comprise of over 70% of the entire digital currency market. The latest coin to be added to this fund is Cardano which is now the 3rd largest holding in that fund; replacing Bitcoin Cash which has now dropped to 4th. Broken down by their top 3 largest holdings, Bitcoin is first and makes up 67.47% of the fund, Ethereum is second and makes up 25.39%, and Cardano is third and makes up 4.26%. It may not seem like a large % compared to Bitcoin and Ethereum, but that’s still over $15 million worth of Cardano and the fact that it was added to Grayscale’s fund at all is huge.
It was back in June when Grayscale first announced that they were researching cryptocurrencies to be added to their large-cap fund which is not a simple task. Grayscale stated “The process of creating an investment product similar to the ones we already offer is a complex, multifaceted process. It requires significant review and consideration and is subject to substantial internal controls, sufficiently secure custody arrangements, and regulatory considerations.”
Because of that, they weren’t just considering a few cryptocurrencies, but a whopping 31 different crypto including Polkadot and Uniswap. This means that they went through 30 other cryptocurrencies before deciding on Cardano and with Grayscale managing over $40 billion, they don’t pick any cryptocurrency unless they believe it’s something that would benefit their fund. After Grayscale made the announcement, the price of Cardano increased 9.02 % from $1.33 to $1.45.