Grayscale Expands Crypto Fund Offerings

Exposure to the price risk of digital assets without holding them may create niches of liquidity and popularize further Ripple and Litecoin.

Grayscale, the issuer of crypto-based investment vehicles, expanded its offerings to add coins that performed well in price and volumes in the past months. The new offerings include Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and Ripple (XRP). The addition of an ETH-based fund is curious, given that Grayscale bet on the performance of Ethereum Classic (ETC) for a long time. Now, Ethereum is once again seen as a potentially strong performer in 2018, warranting the creation of a fund.

Coinbase Announces Crypto Index Fund

The owning of shares in the investment vehicles does not mean owning the digital assets themselves. Yet the latest move is a recognition of the growing influence of previously overlooked assets. Before the expansion, Grayscale included Bitcoin (BTC), Ethereum Classic (ETC), as well as ZCash (ZEC) to its portfolio of offerings.

"There will be more offerings coming from the Grayscale family this year," said Michael Sonnenshein, managing director at Grayscale in an interview for Bloomberg.

But at the moment, the coins usually chosen for investment are the ones that have proven themselves with liquidity and a wider popularity. Yet the funds themselves will not affect the crypto markets, or direct inflows of fresh money. While the fund's price in most cases tracks the market price, the investor profile may be different.

For Grayscale, assets under management for Bitcoin are above $1.94 billion. The newly added Litecoin fund manages just below $500,000. The multi-asset fund based on the Grayscale portfolio of assets manages around $7.3 million. The fund is an indicator of the potential popularity of the recently announced Coinbase index based on a portfolio of assets.

The fund offerings are arriving at a moment when crypto market volumes are falling and enthusiasm may be subdued for a while. Yet the spreading of funds speak of a longer-term belief that crypto coins are here to stay.

And when it comes to picking assets, only a handful now rule the roost. Bitcoin's dominance is growing once again in terms of market capitalization, while rivals are stalling, and the weight of altcoins taken altogether has taken a plunge in the past few weeks.