Original | Odaily Odaily( @OdailyChina )
Author | Fu Howe ( @vincent 31515173 )
Last night, Grayscale announced the launch of the Grayscale Avalanche Trust, which provides qualified investors with investment opportunities in the cryptocurrency AVAX. As soon as the news came out, AVAX rose, with an increase of more than 5% in 1 hour; as of press time today, the 24-hour increase exceeded 10%, temporarily reported at 25.7 USDT.
In fact, in the past half month, AVAX has stabilized at the bottom and started to rebound. Its price fell to a near 9-month low of 17.29 USDT on August 5, and rose to a high of 26.6 USDT, an increase of more than 45% in two weeks.
In addition to the Grayscale AVAX Trust news, global asset management company Franklin Templeton also announced that it would expand its Franklin Onchain US Government Money Fund to the Avalanche network, and the number of AVAX token unlocking events will be greatly reduced after this year. With the support of multiple favorable factors, the price of AVAX can rise so much.
Odaily Odaily found that this year Grayscale frequently launched trust funds for different sectors or tokens, and the related tokens have achieved good growth results in a short period of time. Can Grayscale's launch of new funds serve as a new indicator of retail investment?
Grayscale's new products: a bellwether for the Altcoin market
Since the beginning of the year, Grayscale has frequently launched new cryptocurrency trust funds, including new trusts of SUI and TAO, decentralized artificial intelligence funds, etc. These actions have attracted widespread attention in the cryptocurrency market. The launch of these new funds not only provides more investment options for qualified investors, but also boosts the market performance of related cryptocurrencies to a certain extent.
For example, on August 7, after Grayscale announced the launch of the Grayscale Sui Trust, SUI broke through 0.64 USDT, with a daily increase of more than 10%; on July 17, Grayscale launched the Decentralized Artificial Intelligence Fund (Grayscale Decentralized AI Fund LLC), which covered multiple decentralized AI projects such as Bittensor (TAO), Filecoin (FIL), Livepeer (LPT), Near (NEAR) and Render (RNDR). The above tokens all rose by more than 10% in a short period of time.
Grayscale has brought a significant "confidence effect" to the Altcoin market through its cryptocurrency trust fund. Whenever Grayscale launches a new fund, investors tend to believe that the cryptocurrencies covered by these funds have high investment value, thus driving up their prices. This phenomenon shows that Grayscale plays an important role as a weather vane in the Altcoin market, especially when market sentiment fluctuates greatly, Grayscale's layout direction can often guide the focus of market investment.
Why can Grayscale's cryptocurrency trust fund attract qualified investors? The reason is that Grayscale provides a bridge between the traditional financial market and the cryptocurrency market, allowing investors to access emerging crypto assets through familiar financial instruments. In addition, Grayscale trust funds are usually regulated, which provides investors with a relatively safe and compliant investment approach.
On the other hand, the special mechanism of Grayscale Trust Fund also provides investors with arbitrage opportunities. Grayscale's "naked long trust" mechanism allows investors to obtain shares of cryptocurrency trusts through private subscriptions, and then sell them on the secondary market after the unlocking period, thereby taking advantage of the premium between the primary and secondary markets for arbitrage. For example, Grayscale Trust Funds such as LTC, BCH, and SOL often show high premiums in the secondary market of US stocks, which provides investors with significant arbitrage space.
Specifically, investors can subscribe to cryptocurrency trust shares through private placement in the primary market, unlock these shares after the lock-up period and sell them in the secondary market. Since Grayscale trust funds usually have a high market premium, investors can obtain significant returns in this way. In addition, Grayscale's trust funds are essentially "naked long trusts", which means that in the short term, these trust funds can only be entered but not exited, which further increases the market premium and increases the possibility of arbitrage.
In general, the launch of the new fund by Grayscale provides a channel for institutions and traditional financial investors to participate in the crypto market, and it contains certain arbitrage opportunities, allowing most traditional investors to obtain relatively stable investment returns, thereby allowing Grayscale to earn stable management fees, which will bring certain positive benefits to both parties.
in conclusion
As Grayscale continues to launch new cryptocurrency trust funds, the market increasingly sees it as an investment vane, and Grayscale is guiding the direction of market investment to some extent. Whenever it launches a new fund, the market usually believes that the cryptocurrencies covered by these funds have high potential and investment value. The launch of the AVAX Trust Fund and the subsequent price increase are typical manifestations of this vane effect.
However, investors still need to be cautious when following Grayscale's layout and avoid blindly following the trend. Although Grayscale's trust fund can significantly affect market sentiment and create arbitrage opportunities, the fundamentals of related cryptocurrencies have not necessarily been substantially improved.
As one of the world's largest cryptocurrency asset management companies, every move by Grayscale may have a profound impact on the market. Therefore, investors should use Grayscale's new fund as an important reference indicator, and at the same time make wise investment decisions based on the overall market performance and their own risk tolerance.
