Grayscale, an operator of largest crypto-based OTC investment products, reconsidered its funds component weightings after fourth quarter 2023 reviews. Some major altcoins and top DeFi assets were removed from Grayscale’s baskets, but XRP’s comeback is the most anticipated development.
XRP and AVAX in, MATIC out: Grayscale updates portfolios
After the January 2024 rebalancing, Grayscale started using cash proceeds to purchase Avalanche (AVAX) and XRP, two top 10 altcoins by market capitalization. In the updated structure of its Grayscale Digital Large Cap Fund (OTCQX: GDLC), AVAX and XRP will be responsible for 1.14% and 2.54% of the portfolio value, respectively.
At the same time, Polygon (MATIC) has been removed from GDLC; all MATIC funds backing the product will be sold by Grayscale. This decision is likely intended to “frontrun” the introduction of POL as the new core cryptocurrency of the Polygon 2.0 ecosystem.
Bitcoin (BTC) and Ethereum (ETH) combined total over 91% of the portfolio backing GDLC shares. Solana (SOL) and Cardano (ADA) cryptocurrencies comprise 5.5% of the portfolio.
XRP was removed from the Fund Jan. 4, 2021, following the SEC’s allegations against Ripple Inc. and its key figureheads. In mid-July 2023, the District Court for the Southern District of New York ruled out that XRP is not a security; the SEC’s appeal was dismissed in October 2023.
As covered by U.Today previously, Barry Silbert stepped down from the board of Grayscale Investments in December 2023.
XRP price drops below two-month lows
Besides reconsidering the GDLC portfolio, Grayscale adjusted the structure of assets backing its another popular product, Grayscale DeFi Fund (OTCQB: DEFG).
Curve DAO’s token CRV was removed from the portfolio. Starting from January 2024, the fund only works with Uniswap (UNI), Lido Finance (LDO), MakerDAO (MKR), Aave (AAVE) and Synthetix (SNX).
Despite the major accomplishment — XRP is back to one of the largest cryptocurrency funds available for retail clients — its price action is losing steam.
Today, it dropped below $0.55 on major spot exchanges. As such, XRP’s price erased all gains associated with the starting phase of the bull run: Its rates dropped to late October 2023 values.