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Recently, Grayscale has consecutively launched the Optimism Trust Fund and the Lido Trust Fund. Among its trust funds, SUI and ZEN also continue to rise despite a brief correction. 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.
Overview of Grayscale Cryptocurrency Trusts
Grayscale is a digital asset management company founded in 2013, primarily providing various cryptocurrency trust funds aimed at offering legal and regulated investment channels for investors. As one of the largest cryptocurrency asset management companies globally, 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 such as Bitcoin and Ethereum without directly purchasing and managing them. Each trust fund is linked to a specific cryptocurrency asset, such as Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE). Through these trust funds, investors can buy and sell shares of cryptocurrency assets in the public market just like investing in traditional stocks.
In addition to single-asset trust funds, Grayscale's portfolio fund of multiple cryptocurrencies also has strong investment reference significance. Currently, Grayscale's cryptocurrency trusts, excluding ETFs, are mainly divided into three phases of product cycles.
· PRIVATE PLACEMENT: Grayscale products are initially launched in a private placement format, allowing qualified investors to participate in cryptocurrency investments. The initial restriction period for stocks purchased in private placements is one year. Currently, Grayscale Sui Trust, Grayscale Lido DAO Trust, etc., belong to this phase.
· PUBLIC QUOTATION: A market form of public quotation allows all investors to participate in this cryptocurrency investment. 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 phase.
· 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, providing greater transparency for investors and subjecting the products to additional regulatory oversight. Currently, ETCG, ZCSH, HZEN, etc., belong to this phase.
It's hard to beat BTC in the long run.
According to reports, Grayscale significantly influenced cryptocurrency during the bull market from 2020 to 2021, when Grayscale greatly increased the asset size of Bitcoin trusts, introducing a large number of institutional investors into the crypto space. The performance of other cryptocurrency tokens launched by Grayscale during this period varied in the short term, and they struggled to outperform BTC in the long term.
To track the investment return rates of Grayscale funds, we recorded the token prices when the Grayscale fund launched the trust and the token prices on December 23, creating the chart above. From a time perspective, the launch of Grayscale's cryptocurrency trust products was concentrated before 2018 and 2021, often coinciding with peaks in the bull market or the latter half of it. This phenomenon may be related to the lengthy process and relatively mature market required for Grayscale to launch funds. This December, Grayscale began 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, tokens that present positive investment returns (including BTC, ETH) only account for about 48%, which is lower than the 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 have indeed had brilliant moments, but most occurred before their launch. Even though XRP experienced a strong rebound, it has not yet surpassed its previous high, and ZEN has only barely maintained an 18% investment return after three consecutive days of gains. While some star tokens reached peaks after their launch, their annualized returns over a long-term holding period of 7 years are even below 10%. However, different timing of positions has a more significant impact on investment returns; if Grayscale concept coins are accumulated in a bear market, almost everyone outperforms the average gains of a bull market. Observing targets that have not shown significant fluctuations at this time may lead to good gains next year.
Grayscale holding tokens have different indicative roles at different points in time, and in this sense, Grayscale Select does indeed exist.
I am Penny, a long-term coin holder enthusiast. I don't deal with contracts or leverage. I earn coins in a bear market and earn USDT in a bull market.
If you are also this kind of person, then welcome to follow Penny. Let's navigate through the bull and bear markets together, huddling for warmth and striving to be a rougher leek.