Grayscale launches investment Fund for the five largest cryptocurrency

The Creator of Bitcoin Investment Trust has launched its fourth Fund, aimed at providing accredited investors with the opportunity to enter the cryptocurrency market. Unlike previous Grayscale funds, which focus on bitcoin, Ethereum Classic and Zcash, an initiative called Digital Large Cap Fund, will provide investors with access to the five largest cryptocurrency assets.

When you run a shares of the Fund will be invested solely in a basket of crypto-currency assets, initially including bitcoin (BTC), ether (ETH), ripple (XRP), Bitcoin Cash (BCH) and litecoin (LTC). According to the managing Director of Grayscale, Michael Sonnenshein, the decision to include new currencies was based on the total value of the assets. He said:

"This Fund will enable our clients to make unique investments that will enable them to reach approximately 70% of the market through a single mechanism."


Investors will buy stocks through an investment mechanism backed up by actual cryptocurrency at a cost of 16.00 us Eastern time. The cost will be based on the rate of Digital Asset Reference Rate provided by institutional trading company TradeBlock. Each digital asset will be measured net of the Fund's expenditure and other liabilities.

To account for changes in the market capitalization of cryptocurrencies included in the Fund, their value will be revalued quarterly, while replacing existing assets with new ones if necessary. The Fund is a passive investment instrument that is not actively managed. In addition to market capitalization, liquidity and operational requirements will also be evaluated during the listing.

In addition, the Fund will not offer a share buyback program at startup, i.e. there is no certainty that the value of the shares will approximately correspond to the actual value of the assets. The Fund promptly offers shares to certain accredited investors as described in the securities and exchange Commission (SEC) application.

Interestingly, the total assets managed by Grayscale, a subsidiary of the Digital Currency Group, fell by nearly $ 1 billion over the last couple of months. In December, Silbert, the founder of DCG, tweeted that the company manages $ 3 billion. In a recent statement, this amount fell to $ 2.1 billion.

As confirmed by the work of the previous Grayscale Fund, shares may trade significantly more expensive than the value of the underlying asset, if they are registered in any secondary market in the future. According to an official press release, Grayscale may eventually seek regulatory approval to implement such a share buyback program.

Sonnenschein said that the company intends to follow the path set by their first investment instrument - Bitcoin Investment trust, which operates the OTC trade under the Ticker GBTC: OTCQX.
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