Digital currency asset manager Grayscale Investments has expanded its portfolio of investment products to include smart contract networks in competition with ethereum.
Grayscale Sees Increasing Appetite For Non-ETH Smart Contract Tokens
Grayscale announced Tuesday the launch of a fund referred to as Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE). This new fund, which is the company’s 18th investment product and third diversified fund offering, will give institutional investors exposure to an array of leading smart contract networks. Specifically, the offering features altcoins like Cardano, Solana, Polkadot, Avalanche, Algorand, Polygon, and Stellar.
Solana and Cardano each account for a little over 24% of the fund, while Polkadot and Avalanche constitute roughly 16% each. 9.65% is comprised of Polygon, and Stellar and Algorand each constitute about 4% of the fund.
Grayscale CEO Michael Sonnenshein indicated that the fund was created because investors want diversified exposure to smart contract tokens.
“Smart contract technology is critical to the growth of the digital economy, but it’s still too early to know which platform will win — from attracting and retaining the most vibrant developer communities to ensuring the platform is high-speed, flexible, and scalable.”
One key advantage of the GSCPxE is that investors won’t have to choose. The fund will track CoinDesk Smart Contract Platform Select Ex ETH Index, which estimates the performance of altcoins based on their market capitalizations.
Ethereum made a splash last year boosted by its dominance in the proliferating DeFi and NFT markets. Adding more rocket fuel was the deployment of the game-changing EIP-1559 upgrade which introduced a mechanism that burns a chunk of the gas fees.
CFA, Managing Director, CoinDesk, Jodie Gunzberg noted that Ether’s record growth in the last year has increased investors’ demand for smart contract alternative blockchains. “Many investors allocated to ETH given its explosive growth over the past year, so now there is the demand to get exposure across the rest of the Smart Contract Platform sector,” Gunzberg contends.
At the moment, the fund is only available to eligible individual and accredited investors, but Grayscale will push to get the new product on the secondary markets as it has already done for a number of its investment products.
Grayscale is currently the largest crypto asset manager in the world with more than $36 billion in assets under management as of March 22. In October 2021, the firm revealed plans to convert its flagship GBTC trust fund into a spot bitcoin exchange-traded fund (ETF). Following the SEC delaying its ruling on whether to greenlight Grayscale’s application, the asset manager launched an advocacy campaign urging American investors to submit positive comments to the regulator.
The SEC is expected to reach a decision on the spot ETF before July 6, 2022.