Grayscale Adds AVAX And XRP To Large Cap Fund, Drops MATIC

Grayscale Investments, the world’s largest crypto asset manager, has added AVAX and XRP to its Digital Large Cap Fund while dropping Polygon’s MATIC as a part of updating weightings for its different digital asset funds. According to an announcement on Jan. 5, the new allocations are part of Grayscale’s quarterly review and impact its DeFi Fund (DEFG), Digital Large Cap Fund (GDLC), and Smart Contract Platform Ex-Ethereum Fund (GSCPxE Fund).

The company said it has adjusted the GLDC portfolio by selling the existing MATIC holding and purchasing XRP and AVAX using cash. Grayscale did not specify a reason for dropping MATIC but said, “It’s a result of rebalancing.” The revised composition of the GLDC Fund is as follows: BTC (69.15%), ETH (21.90%), XRP (2.54%), SOL (3.65%), ADA (1.62%), and AVAX (1.14%).

As for Grayscale’s DEFG, among the changes is the removal of the Curve DAO (CRV) token from the portfolio. The new basket includes UNI (41.11%), LDO (23.90%), MKR (13.39%), AAVE (12.63%), and SNX (8.97%).

Meanwhile, MATIC is still present in the GSCPxE Fund. The company did not add or remove any token in the GSCPxE Fund. The fund’s updated composition consists of AVAX (13.89%), ADA (19.77%), SOL (44.54%), DOT (9.75%), MATIC (8.25%), and ATOM (3.80%).

Grayscale stated:

“Neither GDLC, nor DEFG, nor GSCPxE Fund generate any income, and all regularly distribute Fund Components to pay for ongoing expenses. Therefore, the amount of Fund Components represented by shares of each fund gradually decreases over time.”

Fund managers periodically adjust and review the weightings to optimize the fund’s performance according to the prevailing market conditions, investment objectives, and risk assessments. This process is often done quarterly.

To determine its funds’ benchmarks, Grayscale uses the CoinDesk DeFi Select Index methodology. The crypto winter has negatively impacted the firm’s DeFi Fund. At the time of writing, Grayscale’s shares traded at $22, down 9.28% over the past 24 hours.

Grayscale’s Spot Bitcoin ETF Filing

Grayscale put forth another S-3 form, as per a Jan. 2 SEC filing. Moreover, following the resignation of the Grayscale Investments’ Chairman, Barry Silbert, last week, the company amended its filing to convert Grayscale Bitcoin Trust (GBTC) into a Spot Bitcoin ETF. Analysts suggest Grayscale is now complying with the regulators’s cash-only orders. The SEC is expected to announce a decision on Jan. 10.