Author: shaofaye123, Foresight News
Recently, Grayscale has consecutively launched the Optimism Trust Fund and the Lido Trust Fund. The SUI and ZEN in its trust funds also continue to rise despite some pullbacks. Are the trust funds launched by Grayscale really a collection of blue-chip tokens, and will they be profitable in the long run? This article takes you through the 26 cryptocurrency trusts currently launched by Grayscale and their investment returns.
Grayscale Cryptocurrency Trust Overview
Grayscale is a digital asset management company established in 2013, primarily providing various cryptocurrency trust funds aimed at offering investors legal and regulated investment channels. As one of the largest cryptocurrency asset management companies in the world, it manages billions of dollars in assets. To date, Grayscale has launched 26 cryptocurrency trusts.
Grayscale Trust Funds are a series of cryptocurrency investment products offered by Grayscale, allowing investors to indirectly hold cryptocurrencies like Bitcoin and Ethereum without directly purchasing and managing them. Each trust fund is linked to specific cryptocurrencies, such as the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE). Through these trust funds, investors can buy and sell shares of cryptocurrency assets on the public market just like traditional stocks.
In addition to single-currency trust funds, Grayscale's launch of a portfolio of cryptocurrency funds also has strong investment reference significance. Currently, Grayscale's cryptocurrency trusts, apart from ETFs, are mainly divided into three stages.
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 shares purchased in the private placement is one year. Currently, Grayscale Sui Trust, Grayscale Lido DAO Trust, and others belong to this stage.
PUBLIC QUOTATION: A market format of public quotation that allows all investors to participate in cryptocurrency investments. However, due to a lack of a continuous repurchase plan, publicly traded shares may trade at a premium or discount to the value of their underlying assets. Currently, MANA, GLNK, DEFG, and others belong to this stage.
SEC REPORTING: Grayscale products are the first company 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, and others belong to this stage.
Difficult to outperform BTC in the long run
According to reports, Grayscale had a significant impact on cryptocurrencies during the bull market from 2020 to 2021, during which Grayscale significantly increased the asset scale of its Bitcoin trust, introducing a large number of institutional investors into the cryptocurrency space. Other cryptocurrency tokens launched by Grayscale during this period performed variably in the short term and have struggled to outperform BTC in the long term.
To track the investment returns of Grayscale funds, the author recorded the token prices at the launch of Grayscale trusts and the token prices on December 23, creating the above chart. In terms of timing, Grayscale's launch of cryptocurrency trust products was concentrated in 2018 and 2021, which were often peak points or later stages of a bull market. This phenomenon may be related to the relatively lengthy cycle and mature market required for Grayscale to launch funds. This December, Grayscale has begun to concentrate 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, only about 48% of the tokens (including BTC, ETH) show positive investment returns, which is lower than the random 50% probability of flipping a coin. Moreover, their investment return rates are far inferior to BTC, showing a long-term negative EV.
In the short term, the tokens launched by Grayscale did have brilliant moments, but most occurred before their launch. Even though XRP experienced a strong rebound, it has not yet broken through its previous high; after three consecutive days of gains, ZEN barely maintains an 18% investment return. Although some star tokens reached highs after their launch, from the perspective of long-term annualized returns, after a long 7-year holding period, their interest rates are even below 10%. However, different timing in building positions has a more significant impact on investment returns. If Grayscale concept tokens are built at the bottom during a bear market, almost all participants outperform the average gains of the bull market. At this time, observing targets that have not shown obvious fluctuations may welcome good gains next year.
Grayscale's holding tokens have different signaling effects at different times, which in this sense, Grayscale's careful selection does exist.
