Grayscale Adds Cardano To Digital Large Cap Fund

The move comes after months of speculation that Grayscale is adding Cardano to its significant digital asset holdings.

Topics

• Grayscale Adds Cardano
• Cardano Single Trust
• Galaxy Digital v.s. Grayscale

Grayscale investments announced today that they are adding Cardano to its Digital Large Cap Fund. The digital asset manager bills itself as “the world’s largest” of its kind, and boasts more than $30.4 billion in assets as of July 1, 2021.

“Digital currencies represent a unique opportunity for investors to diversify their portfolios,” said Edward McGee, VP of Finance at Grayscale. He added, “we are proud to provide our investors with access to leading digital currencies through regulated, familiar product offerings.”

Grayscale’s Digital Large Cap Fund operates similarly to actively managed ETFs like Cathie Wood’s ARK funds. As prices fluctuate, the fund rebalances its portfolio. The fund seeks to provide Grayscale clients with exposure to 70% of the crypto market.

The readjustment amounts to about 4.26 percent of their portfolio. This makes ADA the fund’s third largest holding, but still far behind Bitcoin (67.47%) and Ethereum (25.39%), respectively.

As a part of the Digital Large Cap Fund, Cardano will receive more institutional exposure. Grayscale’s clients include some of the heaviest hitters in finance like Morgan Stanley, which recently purchased 28,000 share’s of their Bitcoin trust. For Grayscale, adding Cardano comes at a good time with smart contracts expected some time in August. 

ADA rose to 1.38 USD after languishing in the 1.28 range before the announcement this morning. By the late afternoon ADA settled into the 1.36 range.

Cardano Single Trust

Time to add Ada guys. You won't regret it

— Charles Hoskinson (@IOHK_Charles) December 3, 2020

Back in December, Charles Hoskinson responded to a Grayscale tweet with, “Time to add Ada guys. You won’t regret it.” Then a little over a month later, the digital asset manager filed for a Cardano single trust in Delaware. They also filed trusts for Polkadot, Aave, Monero, and Cosmos.

Hoskinson at the time warned Cardano fans that he wouldn’t “hold his breath” before an approved application from the SEC. “Companies will proactively register things,” he said.

Months later, there is still no single trust arising from any of those filings, but Cardano is also the only one from the list added to their diversified fund.

Galaxy Digital vs. Grayscale

Let me translate the billionaire speak for you guys. He's saying that he doesn't see a backdoor to get in at a favorable price or manipulate the market like the rest of the VC coins. Somehow fair, transparent, community led cryptocurrencies are "cults" I'll remember that Mike https://t.co/NksbE1JWsf

— Charles Hoskinson (@IOHK_Charles) June 13, 2021

Grayscale adding Cardano comes not too long after a public feud between Hoskinson and Galaxy Digital, one of Grayscale’s biggest competitors.

During the Bitcoin conference in early June, CEO of Galaxxy Digital, Mike Novogratz played to the crowd, calling Cardano, “a cult.” Via Twitter, Hoskinson accused Novogratz of resenting Cardano’s resilience to venture capital manipulation.