As most altcoins witness distinct trading pattern from Bitcoin’s in the crypto bull market, the recent peculiar trading activity in the space has made a colossal crypto fund change its exposure to various cryptocurrency assets, thus affecting how they expects their individual funds to trend throughout the year.
Recent Market Surge made Grayscale to Shift Crypto Holdings
An announcement was made by Grayscale Investment, an investment group who centers its focuses on digital assets, in a series of tweets declared that the organization has effected an adjustment to its Digital Large Cap Fund’s (DLC) crypto holdings towards the ending of March, clearly reducing its deals with Ethereum and XRP while their action goes in favour of Bitcoin, Litecoin and Bitcoin Cash.
Grayscale detailed the move in the successive tweets, assuring that the decision to shift DLC’s holdings was as a result of their quarterly review, which enhanced the rebalancing of its holdings in order to uphold the fund’s rule-based strategy that “seeks to provide exposure to the large cap segment of the digital asset class.”
1/ Following the Quarterly Review (3/31/19), we are pleased to announce the updated weightings for Digital Large Cap Fund (“DLC”)
— Grayscale (@GrayscaleInvest) April 5, 2019
Grayscale gave an analytical review of how dire the rebalancing of its holdings would be, stating that it will increase the fund’s exposure of Litecoin from 1.8% to 3.3%., Bitcoin Cash from 2.8% to 2.9% and Bitcoin from 66.8% to 68.3%.
Grayscale significantly cut its XRP exposure in order to initiate rise in DLC’s holdings of the cryptocurrencies mentioned above, cutting it from relatively 15% to 12%, while its exposure to Ethereum was slightly reduced by 0.3% (i.e. from 13.9% to 13.6%).
2/ DLC is a passive, rules-based strategy that seeks to provide exposure to the large cap segment of the digital asset class (70% target coverage)
— Grayscale (@GrayscaleInvest) April 5, 2019
Crypto Market Price Action Experienced Lately Possibly dictated the Fund Rebalancing
Grayscale further explained that based on the quarterly review, no new crypto asset was eligible for addition this time.
However, some obvious adjustments that was made to the fund’s exposure of the major cryptocurrencies was possibly dictated by the crypto market price action experienced lately, which resulted to surging of almost all the major digital assets.
The most popular cryptocurrency, Bitcoin, experienced its significant surge over the past month, as it increased from $3,800 to $5,300. This massive soar dictated the increase of the other assets held in the DLC fund, as Bitcoin cash relatively increased by $212 (from $128 to $340), while Litecoin price surged from $50 to about $100.
According to Grayscale, both XRP and Ethereum are expected to experience decrease in price compared to other major cryptos, which will make the decision to reduce their exposure to these assets justifiable, as Bitcoin (BTC), Litecoin and Bitcoin Cash are favoured significantly.
