Author: shaofaye123, Foresight News

Recently, Grayscale has successively launched the Optimism Trust Fund and the Lido Trust Fund. Among its trust funds, SUI and ZEN have also maintained their upward momentum despite a temporary pullback. Are the trust funds launched by Grayscale a collection of blue-chip tokens, and will they be profitable in the long run? This article will give you an overview of the 26 crypto trusts currently launched by Grayscale and their investment returns.

Overview of Grayscale Crypto Trusts

Grayscale is a digital asset management company founded in 2013, primarily providing various crypto asset trust funds aimed at offering investors legitimate and regulated investment channels. As one of the largest crypto asset management companies in the world, it manages billions of dollars in assets. As of now, Grayscale has launched 26 crypto trusts.

Grayscale Trust Funds are a series of crypto asset investment products provided by Grayscale, allowing investors to indirectly hold cryptocurrencies such as Bitcoin and Ethereum without directly purchasing and managing them. Each trust fund is linked to a specific crypto asset, such as the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE). Through these trust funds, investors can buy and sell shares of crypto assets on the public market like traditional stocks.

In addition to single-currency trust funds, the portfolio of multi-currency combination funds launched by Grayscale also has significant investment reference value. Currently, Grayscale's crypto trusts, aside from ETFs, are mainly divided into three stages in terms of product cycles.

  • PRIVATE PLACEMENT: Grayscale products are first launched in a private placement format, allowing qualified investors to participate in cryptocurrency investments. The initial lock-up period for stocks purchased in private placements is one year. Currently, Grayscale Sui Trust, Grayscale Lido DAO Trust, etc., belong to this stage.

  • PUBLIC QUOTATION: A public market form that allows all investors to participate in cryptocurrency investments. However, due to the lack of a continuous repurchase plan, publicly traded stocks may trade at a premium or discount to the value of their underlying assets. Currently, MANA, GLNK, DEFG, etc., belong to this stage.

  • SEC REPORTING: Grayscale products are the first to report to the SEC. The requirements for reporting to the SEC will further enhance disclosure levels, provide greater transparency for investors, and subject the products to additional regulatory oversight. Currently, ETCG, ZCSH, HZEN, etc., belong to this stage.

In the long run, it is difficult to outperform BTC.

According to reports, Grayscale had a significant impact on cryptocurrencies during the bull market from 2020 to 2021, when it substantially increased the asset scale of its Bitcoin trust, bringing in a large number of institutional investors to the crypto space. The other cryptocurrencies launched by Grayscale during this period performed variably in the short term and struggled to outperform BTC in the long term.

To track the investment return rate of Grayscale funds, the author recorded the token prices at the time of the Grayscale fund's trust launch and the token prices on December 23, creating the above chart. From a timing perspective, the launch of Grayscale's crypto trust products was concentrated in 2018 and 2021, which were mostly peak points or later stages of bull markets. This phenomenon may be related to the lengthy cycle and relatively mature market required for Grayscale to launch a fund. In December this year, Grayscale began to focus on launching trust funds again; whether this time it can break the cycle of short-term peaks remains to be seen.

In terms of investment returns, in the long run, the tokens that show a positive investment return (including BTC, ETH) account for only about 48%, which is even lower than the 50% probability of flipping a coin. Moreover, their investment return rate is far inferior to BTC, showing a long-term negative expected value.

In the short term, the tokens launched by Grayscale have indeed had brilliant moments, but most occurred before their launch. XRP has not yet broken its previous high even after experiencing a strong rebound, and after three consecutive days of gains, ZEN barely maintains an 18% investment return. Although some star tokens reach peaks after their launch, from a long-term annualized view, the rate of return after a long holding period of 7 years is even below 10%. However, different timing for building positions has a more significant impact on investment returns. If Grayscale concept coins are acquired at the bottom during a bear market, almost everyone outperforms the average gains in a bull market. Observing targets that have not shown significant movements at this time may bring good gains next year.

Grayscale's held tokens have different indicative roles at different times, in this sense, Grayscale's careful selection does exist.