The cryptocurrency market has experienced a great run as of late, seeing an array of altcoins and even large-cap cryptos achieve massive gains not seen in months. The change in trend was largely led by Bitcoin (BTC), and also propped up by other top-tier cryptos such as Litecoin (LTC) and Bitcoin Cash (BCH).
In light of the recent bullish trading activity, major crypto fund Grayscale Investments – an investment group focused on digital assets, has shifted its exposure with their Digital Large Cap Fund’s (DLC) crypto holdings to 3 of the recent best performing large-cap cryptocurrencies.
Grayscale Favors BTC, BCH, and LTC Over XRP and ETH
Announced in a series of tweets, Grayscale reduced its DLC crypto holdings exposure of both Ethereum (ETH) and Ripple’s XRP, while increasing exposure to Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH).
Grayscale explained their decision to adjust their large-cap exposure on Twitter, noting that the decision came about following their quarterly review and has to do with their rule-based strategy:
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
While Grayscale is rebalancing their DLC crypto holdings, the changes are not overly drastic. Via the Twitter thread, they noted their DLC fund will be increasing its Bitcoin holdings from 66.8% to 68.3%, its exposure to Bitcoin Cash from 2.8% to 2.9%, and its exposure to Litecoin from 1.8% to 3.3%.
Of course, in order to increase exposure of the above-mentioned cryptos, Grayscale had to reduce its holdings of both XRP and Ethereum. Ripple’s XRP saw the greatest reduction in exposure from 14.7% to 11.9%, while Ethereum was only reduced from 13.9% to 13.6%.
No New Crypto Assets Added to the Digital Large Cap Fund
In addition to Grayscale’s DLC adjustment announcement, the investment group noted that no new crypto assets will be eligible to join the fund following the quarterly review.
Via Twitter they stated:
3/ Although no new assets qualified for inclusion following DLC’S Quarterly Review (3/31/19), the below table highlights how DLC’s weightings have changed from December 31, 2018 to March 31, 2019: $BTC $ETH $XRP $BCH $LTC pic.twitter.com/HwlKPKTQDV
— Grayscale (@GrayscaleInvest) April 5, 2019
Fund Rebalancing Sparked by Crypto Market Price Action?
While the DLC fund rebalancing came after Grayscale Investment’s quarterly review, their rebalancing decisions were likely due to the recent crypto market price action and change in market sentiment.
Over the past month, Bitcoin has led the markets into a bullish rally as it surged from lows of roughly $3,800 to $5,300. As a result of this surge, Bitcoin Cash skyrocketed from monthly lows of $128 to recent highs of $340, and Litecoin nearly doubled from lows of $50 to just under $100.
As for XRP and Ethereum, they have lagged behind slightly. Ethereum climbed from monthly lows of $130 to $180, and XRP has remained fairly stagnant as it increased just 19% from lows of $0.30 to a local high of $0.37.
With Grayscale’s reduction of these 2 latter crypto assets, it appears they expect both Ethereum and XRP to continue to lag behind other large-cap cryptos.
Do you think Grayscale Investments made the right move to reduce their Ethereum and XRP holdings? Will Bitcoin, Litecoin, and Bitcoin Cash outperform other large-cap cryptos? Let us know what you think in the comment section below.
