Bitcoin ETF Titan Grayscale Launches A Crypto Staking Fund To Offer Income To Investors

Updated: 06 March 2024

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Grayscale has launched a new fund that stakes cryptocurrencies to generate income for investors.

The company’s CEO, Michael Sonnenshein, called the new fund “an important expansion” of the company’s product suite.

Grayscale Investors Can Participate In Multi-Asset Staking

Sonnenshein said the new fund gives investors access to “multi-asset staking” through a convenient and familiar “singular investment vehicle.”

The Grayscale Dynamic Income Fund (GDIF) will initially hold assets for nine blockchain networks, Grayscale said in a Mar. 5 press releasae.

These are Aptos (APT), Coinbase Staked Ethereum (CBETH), Polkadot (DOT), Near (NEAR), Solana (SOL), Celestia (TIA), Osmosis (OSMO), SEI Network (SEI) and Cosmos (ATOM). Rewards will be distributed on a quarterly basis and paid in U.S. dollars.

I’m increasingly getting bullish on the use of Aptos blockchain in AI, Depin, mass social networks, and now with this news, the utility of the token will by increasingly recognized by the mainstream public.

2024 is the year for @Aptos.https://t.co/dg6zqLAz1A

— JC | TowneSquare (@realjcz) March 6, 2024

GDIF will not only give investors access to the passive income presented by crypto staking, but will also see Grayscale become more involved in the consensus of the nine networks it will initially hold assets for.

The networks the company has selected to feature in the fund all implement a Proof of Stake (PoS) consensus mechanism. This is a more eco-friendly alternative to the Proof of Work (PoW) consensus algorithm Bitcoin (BTC) is built off.

Instead of having to solve complex mathematical puzzles to validate blocks, as is the case with PoW networks, PoS chains select network validators based on their stake in the network’s native crypto.

Grayscale Bitcoin ETF Outflows Continue

The launch of DGIF comes as Grayscale’s spot Bitcoin ETF, GBTC, continues to haemorrhage funds.

Since its conversion to a spot Bitcoin ETF (exchange-traded fund), GBTC has seen almost $10 billion in outflows, according to a Mar. 5 post on X by Bloomberg ETF analyst Eric Balchunas.

$GBTC has seen almost $10b in outflows yet has the same amount of assets it did on launch day. Seems like magic, but it's the bull market subsidy and same physics keeping outflow-ridden active equity mutual funds with massive assets still (albeit mirage-y since customers have… https://t.co/zPiACOvNOQ

— Eric Balchunas (@EricBalchunas) March 5, 2024

Despite these substantial outflows, he noted that GBTC’s assets under management remain at close to the same level when the fund converted to an ETF at the start of the year because of Bitcoin’s surging price.

This surge in the market leader’s price has helped GBTC maintain its pre-conversion revenue levels despite the exodus of investors.