ZEN breaks through 30 USDT, what are the returns on Grayscale's other holdings?
Recently, Grayscale has consecutively launched Optimism Trust Fund and Lido Trust Fund. Among its trust funds, SUI and ZEN have also continued their upward momentum despite a slight 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 takes you through Grayscale's currently launched 26 cryptocurrency trusts 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 investors legitimate and regulated investment channels. As one of the largest cryptocurrency asset management companies in the world, it manages billions of dollars in assets. As of now, Grayscale has launched 26 cryptocurrency trusts.
Grayscale Trust Funds are a series of cryptocurrency investment products provided by Grayscale, allowing investors to indirectly hold cryptocurrencies like Bitcoin and Ethereum without directly purchasing and managing them. Each trust fund is linked to a specific cryptocurrency 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 cryptocurrency assets on the public market like they would with traditional stocks.
In addition to single-coin trust funds, the portfolio funds launched by Grayscale also have strong investment reference significance. Currently, Grayscale's cryptocurrency trusts, apart from ETFs, mainly divide their product cycles 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 private placements is one year. Currently, Grayscale Sui Trust, Grayscale Lido DAO Trust, etc., belong to this stage.
PUBLIC QUOTATION: A market format with public quotations, allowing all investors to participate in cryptocurrency investments. However, due to the lack of a continuous buyback plan, publicly traded shares 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 requirement to report to the SEC will further improve disclosure levels, provide greater transparency for investors, and subject the products to additional regulatory oversight. Currently, ETCG, ZCSH, HZEN, etc., 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 greatly increased the asset scale of Bitcoin trusts, bringing in a large number of institutional investors into the cryptocurrency space. The performance of other cryptocurrency tokens launched by Grayscale during this period was varied in the short term and has struggled to outperform BTC in the long term.
To track the investment returns of Grayscale funds, the author recorded the token prices when Grayscale funds launched trusts and the token prices on December 23, creating the chart above. From a temporal perspective, the timing of Grayscale launching cryptocurrency trust products was mostly concentrated in 2018 and 2021, which were often peak points or the latter stages of bull markets. This phenomenon may be related to the longer cycle and relatively mature market required for Grayscale to launch funds. This December, Grayscale has begun to focus on launching trust funds again; whether this time it can break the cycle of short-term peaks is yet to be seen.
In terms of investment returns, in the long run, the tokens that show positive investment returns (including BTC, ETH) account for only about 48%, which is even lower than the random 50% probability of flipping a coin. Moreover, their investment return rates are far less than BTC, showing a long-term negative EV.
In the short term, the tokens launched by Grayscale indeed had glorious moments, but most occurred before their launch. XRP, even after a strong rebound, has not broken its previous high, and after three consecutive days of increases, ZEN barely maintains an 18% investment return. Although some star tokens reached peaks after their launch, when looking at long-term annualized returns after a long 7-year holding period, their interest rates are even below 10%. However, the timing of different entry points has a more significant impact on investment returns. If Grayscale concept tokens are accumulated at the bottom in a bear market, almost all participants outperform the average increase in a bull market. Observing targets that have not shown significant movements might yield good returns next year.
Grayscale's holding tokens have different indicative roles at different time periods, in this sense, Grayscale's careful selection does indeed exist.
Recently, Grayscale has consecutively launched Optimism Trust Fund and Lido Trust Fund. Among its trust funds, SUI and ZEN have also continued their upward momentum despite a slight 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 takes you through Grayscale's currently launched 26 cryptocurrency trusts 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 investors legitimate and regulated investment channels. As one of the largest cryptocurrency asset management companies in the world, it manages billions of dollars in assets. As of now, Grayscale has launched 26 cryptocurrency trusts.
Grayscale Trust Funds are a series of cryptocurrency investment products provided by Grayscale, allowing investors to indirectly hold cryptocurrencies like Bitcoin and Ethereum without directly purchasing and managing them. Each trust fund is linked to a specific cryptocurrency 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 cryptocurrency assets on the public market like they would with traditional stocks.
In addition to single-coin trust funds, the portfolio funds launched by Grayscale also have strong investment reference significance. Currently, Grayscale's cryptocurrency trusts, apart from ETFs, mainly divide their product cycles 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 private placements is one year. Currently, Grayscale Sui Trust, Grayscale Lido DAO Trust, etc., belong to this stage.
PUBLIC QUOTATION: A market format with public quotations, allowing all investors to participate in cryptocurrency investments. However, due to the lack of a continuous buyback plan, publicly traded shares 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 requirement to report to the SEC will further improve disclosure levels, provide greater transparency for investors, and subject the products to additional regulatory oversight. Currently, ETCG, ZCSH, HZEN, etc., 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 greatly increased the asset scale of Bitcoin trusts, bringing in a large number of institutional investors into the cryptocurrency space. The performance of other cryptocurrency tokens launched by Grayscale during this period was varied in the short term and has struggled to outperform BTC in the long term.
To track the investment returns of Grayscale funds, the author recorded the token prices when Grayscale funds launched trusts and the token prices on December 23, creating the chart above. From a temporal perspective, the timing of Grayscale launching cryptocurrency trust products was mostly concentrated in 2018 and 2021, which were often peak points or the latter stages of bull markets. This phenomenon may be related to the longer cycle and relatively mature market required for Grayscale to launch funds. This December, Grayscale has begun to focus on launching trust funds again; whether this time it can break the cycle of short-term peaks is yet to be seen.
In terms of investment returns, in the long run, the tokens that show positive investment returns (including BTC, ETH) account for only about 48%, which is even lower than the random 50% probability of flipping a coin. Moreover, their investment return rates are far less than BTC, showing a long-term negative EV.
In the short term, the tokens launched by Grayscale indeed had glorious moments, but most occurred before their launch. XRP, even after a strong rebound, has not broken its previous high, and after three consecutive days of increases, ZEN barely maintains an 18% investment return. Although some star tokens reached peaks after their launch, when looking at long-term annualized returns after a long 7-year holding period, their interest rates are even below 10%. However, the timing of different entry points has a more significant impact on investment returns. If Grayscale concept tokens are accumulated at the bottom in a bear market, almost all participants outperform the average increase in a bull market. Observing targets that have not shown significant movements might yield good returns next year.
Grayscale's holding tokens have different indicative roles at different time periods, in this sense, Grayscale's careful selection does indeed exist.
