Article sourced from: Nancy
Author: Nancy, PANews
Recently, with the price surges of tokens like SUI and ZEN, the 'Grayscale Effect' has re-emerged, and Grayscale's holdings have become one of the market's investment barometers. So, how do the carefully selected cryptocurrencies by Grayscale perform in terms of return on investment? This article from PANews reviews the market performance of the 14 tokens involved in the cryptocurrency trust funds launched by Grayscale during the last bull market cycle, covering the period from March 2021 to March 2022.
Average return rate exceeds 200%, with significant market cycle impact.
During the last bull market, Grayscale launched 14 cryptocurrency trust products through the OTC market, DeFi fund DEFG, and GSCPxE fund, which were opened one after another over approximately a year. From the timing of product launches, Grayscale began introducing related token funds at the start of the bull market and accelerated its layout frequency in the mid to late stages.
In terms of investment returns, these 14 tokens saw an average maximum increase of 204.8% after Grayscale's launch. Among them, LPT, LDO, and BAT had particularly outstanding increases of 1497.1%, 292.6%, and 239.8%, respectively. In contrast, the increases of SOL, DOT, and SNX were far below the average level.
From the perspective of the time required to generate investment returns, the average cycle for the 14 tokens to reach new highs was 84.4 days, with BAT, MANA, and LPT requiring a longer period, generally exceeding 250 days, but their return rates were also relatively high; while SOL, FIL, AVAX, and DOT reached new highs in a shorter time, their price increases were relatively limited, occurring during a market adjustment phase following Bitcoin's new high. This phenomenon not only indicates that, typically, the longer the holding period during a bull market, the more advantageous the returns, but is also related to the timing of product launches. Previous sector uptrends show that public chains are mostly the targets in the first wave of bull market increases, and most of the projects launched by Grayscale achieved good price increases in the early stage, resulting in limited upward space later on.
However, this difference is also influenced to some extent by changes in market cycles. Specifically, the token funds launched by Grayscale at the beginning of the bull market in the first half of 2021 had an average increase of 446.8%; while in the mid-bull market period from April to November 2021, the increase dropped to 85.4%; by the market correction period in March 2022, the launched tokens had only a 40.3% increase. This shows that Grayscale's investment return rates are heavily influenced by market cycle fluctuations, exhibiting clear cyclical characteristics.
From this perspective, although Grayscale's cryptocurrency trust products provided considerable returns during the bull market, their performance is significantly affected by market volatility. Therefore, investors should fully consider the overall market trend when making investment decisions.
Participating in multiple explosive token layouts, expanding the range of investment products.
Recently, multiple tokens have demonstrated strong price performance, and Grayscale's layout may play an important role in driving market trends.
For example, XRP, which recently broke a multi-year high. In September this year, Grayscale announced it would re-launch the first U.S. XRP trust fund and has recently opened it officially to qualified investors. It is worth noting that as early as January 2021, Grayscale removed the XRP trust and liquidated its holdings of tokens due to legal disputes with Ripple. This shift has also been interpreted by the public as paving the way for a potential XRP spot ETF, and XRP's price has continued to rise in the following months, indicating a positive market reaction to Grayscale's move.
The price of SUI has also performed strongly in recent months. A few months ago, Grayscale updated its investment strategy and announced the Top 20 tokens expected to rise significantly by the end of 2024, which included 6 new tokens such as SUI and TAO. At the same time, Grayscale began its investment layout for SUI, announcing in August this year the launch of Grayscale Sui Trust, which has recently been officially opened to qualified investors.
Another noteworthy token is ZEN, which has also performed well recently, with an increase of about 215% over 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 in a securities format.
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, XRP, and fund products from niche sectors like DeFi and AI, allowing investors to subscribe at net asset value (NAV). The products include thematic funds such as Grayscale Decentralized AI Fund and Grayscale Decentralized Finance Fund, as well as single-asset trusts for emerging protocols like Bittensor, Lido DAO, and Optimism.
Additionally, 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 initiation of recruitment, with positions including: Tax Director, Senior ETF Product Manager, Digital Asset Trader, Portfolio Manager, Product Manager, and Engineering Director.
Although the specific impact of these measures on token price changes has not yet fully manifested, Grayscale's provision of more diversified and specialized investment products for investors will further drive cryptocurrency assets into the mainstream market.
Related reading: A review of 21 Grayscale cryptocurrency trust funds: some up 10 times, some on a downward trend, easily stepping on the late train of the bull market to become market counter-indicators.
