Cryptocurrency ‘Large Cap Fund’ Launched By Grayscale Investments

Announcements, Investing | February 9, 2018 By:

Grayscale Investments has launched a new investment vehicle, the Grayscale Digital Large Cap Fund. The fund aims to give accredited investors a way to explore cryptocurrencies.

Grayscale Investments, a wholly-owned subsidiary of Digital Currency Group, is a digital currency investing firm. It manages the Bitcoin Investment Trust (GBTC), which provides titled, auditable bitcoin exposure through a traditional investment vehicle. GBTC shares are the first publicly quoted securities solely invested in, and deriving value from, the price of bitcoin. Grayscale has assets under management of $1.31 billion.

The Grayscale Digital Large Cap Fund intends to hold the top digital assets by market capitalization that meet the company’s fund construction criteria in a market capitalization-weighted portfolio. The fund is a Cayman Islands limited liability company but based in the United States.

The fund targets 70% coverage of the digital asset market. Initially, the fund is expected to hold bitcoin, ethereum, Ripple, Bitcoin Cash and Litecoin. It may also hold cash and assets arising as a result of a fork, airdrop or similar occurrence from time to time.

“We’re excited to further expand the universe of Grayscale’s product offerings as interest in the digital currency asset class continues to grow,” said Barry Silbert, CEO of Grayscale. “As a trusted and experienced manager, Grayscale is committed to creating investment structures that are familiar to qualified investors and provide secure access to this emerging asset class.”

The investment objective of the Fund is for the shares to reflect the value of the fund components, determined by reference to TradeBlock’s Digital Asset Reference Rate for each Fund Component at 4:00 p.m. New York time. The New York-based firm believes that the shares represent a cost-effective and convenient investment relative to a direct investment in digital assets.

“Investors are looking for broad market exposure to the digital currency asset class,” Michael Sonnenshein, Grayscale managing director, said. “This gives them the ability to make a singular investment that is going to give them exposure to approximately 70 percent of the market via this one vehicle.”

Grayscale said the product is not registered with the US Securities and Exchange Commission (SEC) and is not subject to American based securities laws. As a result, the shares of each vehicle are restricted and subject to significant limitations on resales and transfers.