ZEN breaks through 30 USDT, and the returns of Grayscale's other holdings are geometric.
Author: shaofaye123, Foresight News
Recently, Grayscale has launched the Optimism Trust and the Lido Trust one after another. The SUI and ZEN in its trust funds have also maintained an upward trend despite a temporary pullback. Are the trust funds launched by Grayscale really a collection of blue-chip tokens, and will they be profitable in the long run? This article will give you an overview of the 26 crypto trusts currently launched by Grayscale and their investment returns.
Overview of Grayscale Crypto Trusts
Grayscale is a digital asset management company founded in 2013, primarily providing various crypto asset trust funds, aiming to provide investors with a legal and regulated investment channel. As one of the largest crypto asset management companies in the world, it manages billions of dollars in assets. To date, Grayscale has launched 26 crypto trusts.
Grayscale Trust Funds are a series of crypto asset investment products provided by Grayscale, which allow investors to indirectly hold cryptocurrencies such as Bitcoin and Ethereum without directly purchasing and managing them. Each trust fund is linked to a specific crypto 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 crypto assets on the open market, just like investing in traditional stocks.
In addition to single-currency trust funds, the diversified currency portfolio funds launched by Grayscale also have strong investment reference value. Currently, Grayscale's crypto trusts, excluding ETFs, are mainly divided into three stages.
- PRIVATE PLACEMENT: Grayscale products are first launched in the form of private placements, allowing qualified investors to participate in crypto currency investment. The initial lock-up period for privately placed shares is one year. Currently, Grayscale Sui Trust and Grayscale Lido DAO Trust belong to this stage.
- PUBLIC QUOTATION: The market form of public quotation, allowing all investors to participate in the investment of this cryptocurrency. However, due to the lack of a continuous repurchase plan, publicly traded shares may be traded at a premium or discount to the value of the underlying asset. Currently, MANA, GLNK, and DEFG 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 the level of disclosure, providing investors with greater transparency and subjecting the products to additional regulatory oversight. Currently, ETCG, ZCSH, and HZEN 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, when it significantly increased the asset size of the Bitcoin trust, introducing a large number of institutional investors to the crypto field. However, the other crypto tokens launched by Grayscale during this period have not performed well in the short term, and it is difficult for them to outperform BTC in the long run.
To track the investment returns of Grayscale funds, the author recorded the token prices when the Grayscale funds launched the trusts and the token prices on December 23, and compiled the above chart. From the timeline, Grayscale's launch of crypto trust products was concentrated in 2018 and 2021, which were mostly cyclical highs or the latter part of the bull market. This phenomenon may be related to the relatively long cycle and relatively mature market required for Grayscale to launch funds. And Grayscale has started to concentrate on launching trust funds again this December, whether it can break the cycle of short-term highs.
In terms of investment returns, in the long run, only about 48% of the tokens (including BTC and ETH) have shown positive investment returns, which is even lower than the 50% probability of randomly flipping a coin. Moreover, their investment returns are far behind BTC, showing negative EV in the long run.
In the short term, the tokens launched by Grayscale have indeed had glorious moments, but most of them occurred before their launch. XRP has not yet broken through its previous high even after a strong rebound, and ZEN has only barely maintained an 18% investment return after three consecutive days of gains. Although some star tokens have reached new highs after their launch, if viewed from a long-term annualized perspective, their yields are less than 10% after a long 7-year holding period. However, different entry timing has a more important impact on investment returns. If Grayscale concept tokens are bought at the bottom of the bear market, they can almost all outperform the average bull market gains. Observing the targets that have not yet shown obvious changes at this time may see good gains next year.
The tokens held by Grayscale have different indicative functions at different stages, and in this sense, Grayscale's careful selection does exist.
