Grayscale Investment is a group that focuses on digital assets that have reviewed their Digital Large Cap Fund. They have lessened their exposure to Ethereum and XRP, but have increased exposure to Bitcoin and Litecoin. This change came about due to the quarterly review undertaken of the current large cap crypto market.
Bitcoin, not the trendsetter it once was
What many have noticed is that Bitcoin does not set trends in the same way it used to. The market has moved significantly without Bitcoin moving in the same direction. The peaks of various altcoins have far exceeded Bitcoin in growth in this latest bull rush. However, industry analysts do say that Bitcoin still determines which way the market will go. There is not enough independence within the overall crypto market to fully severe itself from Bitcoin.
The new exposures given by Grayscale Investments sends a strong signal of what they expect from the rest of 2019. The company explained its actions in a series of tweets. The key takeaway was that it was done based on the quarterly review of the cryptocurrency market. The market between January and March changed significantly and an update was needed for their DLC Fund.
Clear rules guiding investments
The company emphasized that the DLC Fund is a passive fund. One that follows a rules-based strategy to provide exposure to the Large Cap crypto market. The fund targets about 70% coverage of the large-cap crypto market.
The statistic provided in this tweet shows how drastic their changes will actually be. The Bitcoin coverage will be increasing by 1.5% from 66.8 to 68.3 percent. Ethereum, on the other hand, drops 0.3% from 13.9 to 13.6 percent. XRP is the biggest loser in this round tweaks. The coin tied to the Ripple protocol went from 14.7% coverage to just 11.9% coverage in the DLC Fund. This drop of 2.8% is drastic. Whatever the rules that Grayscale Investments do follow, show that Ripple is not a favorite in the market in their opinion.
Bitcoin Cash increased only very slightly, picking up an extra 0.1% exposure, from 2.8 to 2.9 percent. Litecoin was the major winner increasing 2.5% overall and increasing its exposure in the fund from 1.8 to 3.3 percent.
Bitcoin traders looking at the long game would do well to keep their Bitcoin wallet full, and maybe even invest in Litecoin according to these figures.
Recent market behavior key to changes
The boom of Bitcoin going from a low of 3800 to a high of 5300 US dollars help spur on the rest of the market. While Bitcoin was booming, so were other coins such as Bitcoin Cash (BCH). BCH increased massively, going from 120 dollars to 340 dollars. Litecoin doubled, going from 50 dollars to (just under) 100 dollars.
However, XRP and Ethereum both lagged behind most of the others, which makes it no surprise that the fund lessened the exposure to those assets. Ethereum rose from 130 dollars to just 180 at the same time as the others. XRP meanwhile only appreciated 7 cents. IT grew from $0.30 to $0.37. This underwhelming performance is the reason for the changes in many traders behavior.