Grayscale Announces 5 New Investment Trusts

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In Brief
  • Grayscale announced the launch of five new digital currency investment trusts.

  • The new trusts are the first Grayscale has introduced since 2019 due to increased interest in crypto, and the chance to enter smaller markets.

  • Most Grayscale products are not available OTC, due to regulatory concerns.

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Grayscale Investments announced the launch of five new digital currency investment trusts. This brings the world’s largest digital currency asset manager’s number of investment products to 14.

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Three of the funds will feature the individual cryptocurrencies Chainlink, Filecoin, and Livepeer. Another will include Basic Attention Token, which operates on Ethereum. The fifth will invest in the coins of virtual-reality world Decentraland.

Grayscale’s New Products

These news trusts are the first Grayscale has introduced since 2019. One reason they appear now is to offer alternative crypto products to increasingly interested investors. Fearful of entering Bitcoin (BTC) or Ethereum (ETH) at what they feel could be the top of the market, these smaller markets offer a more attractive entry point.

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“Digital currencies have reached an inflection point. Investor demand has never been higher, and every day we’re seeing new entrants to what has surely become a bona fide asset class,” said Grayscale CEO Michael Sonnenshein. 

Basic Attention tokens help determine how to distribute advertising money by tracking users’ time and attention on digital properties. Ethereum-based Chainlink delivers price feeds into various decentralized finance (DeFi) apps. Filecoin is a data storage protocol where users pay to store their files. Meanwhile, Livepeer is a decentralized content delivery network. Finally, the Decentraland Trust will hold MANA tokens. Players can use them to buy virtual plots of land in Decentraland.

The company chose those specific crypto products following a “robust process.” This consisted of assessing the demand of potential investors, in addition to investigating the integrity of the underlying protocols, according to Sonnenshein.

“At any one time, we’re probably maintaining a list of what could be 30 products, could be 40 products that we’re interested in bringing to market,” Sonnenshein told Bloomberg. “We’re trying to always reconcile where we may find compelling opportunities in the digital assets ecosystem and trying to reconcile where investors are interested in deploying capital,” he explained.

Other Assets

Traditionally, Grayscale products have enabled investors to participate in the crypto market without actually having to purchase any themselves. Grayscale’s other single-asset investment products include trusts for Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Horizen (ZEN), Litecoin (LTC), Stellar Lumens (XLM), and Zcash (ZEC). 

However, only a handful of their products are available in the over-the-counter (OTC) markets. Grayscale said this is due to questions regulators such as the SEC, FINRA may have about the products. Grayscale noted that its investment products are available to accredited investors through periodic private placements. 

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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