Grayscale, the world's largest crypto asset manager, has made significant adjustments to its Digital Large Cap Fund (GDLC), removing Cardano (ADA) from the fund's portfolio. The announcement was made Thursday as part of the company's Q1 2024 quarterly review.
Specifically, the firm disclosed that it sold its holdings in ADA as part of its quarterly rebalancing and reallocated the proceeds to the purchase of existing fund components according to their respective weights. As a result, ADA was excluded from the GDLC.
“On a quarterly basis, we rebalance and update the components of our three multi-asset funds: Grayscale Digital Large Cap Fund, Grayscale DeFi Fund, and Grayscale Smart Contract Platform Ex-Ethereum Fund. ” office I have writtenhe added.Following the methodology of the CoinDesk Large Cap Select Index, Grayscale adjusted GDLC's portfolio by selling Cardano (ADA) and using the proceeds to purchase existing fund components in proportion to their respective weights. . ”
With these adjustments, the current composition of the GDLC fund includes Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Avalanche (AVAX).
The removal of ADA follows a similar adjustment in early January, when Grayscale removed Polygon's MATIC from the fund while incorporating assets such as Avalanche (AVAX) and XRP.
Grayscale's Digital Large Cap Fund is a pioneering security that invests exclusively in a basket of large-cap digital assets. According to the company's website, the fund aims to reflect the value of digital assets while avoiding the complexities associated with directly acquiring and storing these assets.
The decision to exclude ADA from the GDLC fund marks a significant change from Grayscale's previous stance. Notably, the firm added ADA to its large-cap fund in 2021, making it the third-largest holding in its portfolio.
That said, while Grayscale continues to maintain its dominant position in institutional crypto custody and investment, the evolving regulatory landscape has forced other industry players to move beyond Bitcoin and Ethereum. I started diversifying my portfolio.
One such player is the Bitwise 10 Crypto Index Fund, which aims to reflect an index made up of the top 10 most valuable cryptocurrencies. Notably, the fund currently offers investors diversified exposure to his ADA, but its allocation is modest at 1.1%.
As regulations become clearer, expansion into alternative digital assets by other funds like VanEck could surge, giving investors more diverse investment opportunities.
That said, Grayscale's ADA deletion comes in the face of relatively stable price action after a tumultuous week in which the cryptocurrency experienced an 11.66% decline and relinquished market cap status to Dogecoin. It was done nevertheless.
The cryptocurrency was trading at $0.58 at the time of writing, reflecting a decline of 0.56% over the past 24 hours.
