Grayscale Investments, an American digital asset management company, is working on expanding its portfolio of investment products, as it announced that it is in the finishing stages of launching a diversified cryptocurrency invest offering.
According to an official company announcement published on November 22, the new fund will be called the Grayscale Digital Large Cap Fund (DLC). DLC will prove opportunities to invest in five major crypto assets, (including Bitcoin and Ether), and will soon be available on OTCQX Best Market, a popular over-the-counter (OTC) share trading marketplace.
The DLC was launched in 2018, and up until now, it has remained an open-ended fund for the higher 70 percent of the digital asset class. However, as the announcement notes, Grayscale will now be working to make it publicly traded, with its ticker set as GDLCF.
The GDLCF will purportedly be the pioneer publicly-quoted security pegged to a basket of securities. As of October 31, 2019, the fund included 80.6% of Bitcoin, 9.2% of Ether, 6.0% of XRP, 2.5% of Bitcoin Cash, and 1.7% of Litecoin.
GDLCF will also be Grayscale’s fourth publicly-quoted investment product, coming after the Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust.
Grayscale’s Breakout Year
Grayscale has experienced tremendous growth this year, as its investment portfolio has seen a surge thanks to the increase in cryptocurrency prices across the board. Of course, while a chunk of its increase has been due to the surge in prices for Bitcoin and Ether, its portfolio, in general, has been largely more profitable than what it had last year.
Early last month, the New York-based company published its quarterly report for Q3, which showed that its portfolio was rather healthy. According to the report, Grayscale had gotten $254.9 million in net investments, a new record for the company, which represented about a 300 percent increase over the $85 million that it got in the previous quarter.
Michael Sonnenshein, the company’s Managing Director, pointed out that the record inflows were a direct implication of the increase in cryptocurrency interest from professional investors he also credited “Drop Gold,” an advertising campaign launched by the company to lure investors towards cryptocurrencies, as opposed to the yellowback.
“When the world gets to be the way it is at the moment, these institutions want a new source of alpha,” he said, referring to the ability of investments to outperform the market. “There’s also a growing acceptance that younger generations want a part of this asset class.”
Company Operations Set to Change
The company also announced in a November 10 blog post that it had filed Form 10 with the United States Securities and Exchange Commission (SEC), effectively becoming the first cryptocurrency fund to directly report to the financial watchdog.
In the post, the company pointed out that several aspects of its operations could change if the form is deemed sufficient by the SEC. While its structure would remain the same and it won’t be made to a national securities exchange, it will need to change its scope of operations.
If its filing is accepted, Grayscale will designate its fund as an SEC reporting company, thus having to register its shares under the Exchange Act. Apart from that, the company noted that its eligible investor audience could become wider, as most investors tend to consider SEC approval when selecting trusts.