Author: Nancy, PANews
Recently, as the prices of SUI and ZEN soared, the 'Grayscale Effect' re-emerged, and Grayscale's holdings have become one of the market's investment barometers. So, how does the performance of the carefully selected crypto tokens by Grayscale stack up in terms of investment returns? This article reviews the market performance of the 14 tokens involved in Grayscale's launched crypto trust funds during the last bull market cycle, covering the period from March 2021 to March 2022.
Average return rate exceeds 200%, market cycle impact is significant
During the last bull market, Grayscale launched 14 cryptocurrency trust products through the over-the-counter market, DeFi fund DEFG, and GSCPxE fund, which were successively opened over about a year. From the timing of product launches, Grayscale started introducing related token funds at the beginning of the bull market and increased the frequency of launches in the mid-to-late stages.
In terms of investment return rates, these 14 tokens had an average maximum increase of 204.8% after Grayscale launched them. Among them, LPT, LDO, and BAT stood out with increases of 1497.1%, 292.6%, and 239.8%, respectively. In contrast, the increases for SOL, DOT, and SNX were far below the average level.
In terms of the time required to generate returns on investment, the average cycle for the 14 tokens to reach new highs is 84.4 days, with BAT, MANA, and LPT requiring a longer period, generally exceeding 250 days, but their return rates are also relatively high; while SOL, FIL, AVAX, and DOT reached new highs in a shorter period, but their increases were relatively limited, coinciding with the market adjustment period after Bitcoin's new highs. This phenomenon not only indicates that typically, the longer the investment time during a bull market, the more advantageous the holding yield, but is also related to the timing of product launches, as past sector rise cycles showed that public chains were mostly the first wave of bull market targets, with many of Grayscale's launched projects achieving considerable increases in the early stage, leading to limited upward space in the later stage.
However, this disparity is also influenced to some extent by changes in market cycles. Specifically, the average increase for the token funds launched by Grayscale during the early bull market in the first half of 2021 was 446.8%; during the mid-bull market from April to November 2021, the increase dropped to 85.4%; by March 2022, during the crypto market correction period, the increase for the tokens launched was only 40.3%. This shows that Grayscale's investment return rates are significantly affected by market cycle fluctuations, presenting a clear cyclical characteristic.
From this perspective, although Grayscale's cryptocurrency trust products provided considerable returns during the bull market, their performance was significantly affected by market volatility. Therefore, investors should fully consider the overall market trend when making investment decisions.
Participate in the layout of multiple explosive tokens, expanding the range of investment products
Recently, multiple tokens have shown strong price performances, and Grayscale's layout may play an important role in driving market trends.
For example, recently the price of XRP broke a multi-year high. In September this year, Grayscale announced the re-launch of the first U.S. XRP trust fund, which was officially opened to qualified investors in the near term. It’s worth noting that as early as January 2021, Grayscale removed the XRP trust due to legal disputes with Ripple and liquidated its held tokens. This shift has also been interpreted by the outside world as paving the way for a potential XRP spot ETF, and the price of XRP has continued to rise over the following months, indicating a positive market response to Grayscale's initiative.
The price of SUI has also shown strong performance in recent months. A few months ago, Grayscale updated its investment strategy and announced the top 20 tokens expected to see significant increases by the end of 2024, including the addition of 6 new tokens such as SUI and TAO. At the same time, Grayscale also initiated its investment layout for SUI, announcing the launch of Grayscale Sui Trust in August this year, which has recently been officially opened to qualified investors.
Another noteworthy token is ZEN, which has also seen a remarkable price increase recently, with a rise of about 215% in the past 30 days. After recently increasing its holdings of ZEN tokens, Grayscale also announced the submission of the Grayscale Horizen Trust (ZEN) 8-K form to the SEC, allowing investors to gain exposure to ZEN tokens through securities.
In addition to the above projects, Grayscale has also provided legitimacy and recognition for more crypto assets. On December 24, Grayscale announced the opening of private placements for 22 cryptocurrency trust products to qualified investors, including mainstream tokens such as AAVE, AVAX, LINK, SOL, and XRP, as well as fund products in niche sectors like DeFi and AI, allowing investors to subscribe at net asset value (NAV). The opened products cover themed funds like the Grayscale Decentralized AI Fund and Grayscale Decentralized Finance Fund, as well as single-asset trusts for emerging protocols such as Bittensor, Lido DAO, and Optimism.
In addition, Grayscale is further accelerating its business expansion and seeking more professionals to meet the increasingly complex market demands. At the beginning of this month, Grayscale announced the launch of recruitment, covering positions such as: Tax Director, Senior ETF Product Manager, Digital Asset Trader, Portfolio Manager, Product Manager, and Engineering Director.
Although the specific impact of these initiatives on price changes has not yet fully manifested, Grayscale is further promoting the mainstreaming of crypto assets by providing investors with more diversified and specialized investment products.
