Grayscale Adjusts Crypto Holdings After Recent Market Surge

An investment group focusing on digital assets, Grayscale Investments, has revealed in a series of tweets the adjustments they made in their Digital Large Cap Fund’s (DLC) cryptocurrency holdings in late-March, significantly reducing its exposure to XRP and Ethereum while increasing their exposure to Bitcoin, Bitcoin Cash, and Litecoin.

Grayscale explained the move on Twitter, saying the decision to shift the DLC’s holdings came after their quarterly review, which led to a rebalancing of its holdings to maintain the fund’s rule-based strategy which “seeks to provide exposure to the large cap segment of the digital asset class.”

“Following the Quarterly Review (3/31/19), we are pleased to announce the updated weightings for Digital Large Cap Fund (‘DLC’),” Grayscale detailed, elaborating on the DLC fund, saying it is “a passive, rules-based strategy that seeks to provide exposure to the large cap segment of the digital asset class (70% target coverage).”

Grayscale has also given the statistics for precisely how drastic the rebalancing would be, stating that they will raise the fund’s exposure to Litecoin from 1.8% to 3.3%, Bitcoin from 66.8% to 68.3%, and Bitcoin Cash from 2.8% to 2.9%.

To increase the DLC’s holdings of the three said cryptocurrencies, Grayscale drastically reduced its XRP exposure from 14.7% to 11.9%. Its exposure to Ethereum was also slightly cut from 13.9% to 13.6%.

“Although no new assets qualified for inclusion following DLC’S Quarterly Review (3/31/19), the below table highlights how DLC’s weightings have changed from December 31, 2018 to March 31, 2019: $BTC $ETH $XRP $BCH $LTC,” Grayscale noted on Twitter.

The decision to make notable adjustments to the fund’s exposure to major digital currencies was likely caused by the previous price action within the cryptocurrency markets that led virtually every major crypto asset to surge significantly.

In the previous month, Bitcoin surged from lows of about $3,800 to highs of $5,300. That surge led the other assets held in the DLC fund to jump, with Litecoin climbing from lows of $50 to highs of only under $100, and Bitcoin Cash spiking from monthly lows of $128 to highs of $340.

Both Ethereum and XRP have slightly lagged behind the other major coins, with XRP rising from lows of roughly $0.30 to highs of $0.37, and Ethereum jumping from monthly lows of $130 to highs of only over $180.

Grayscale likely expects XRP and Ethereum to continue lagging behind other leading alts to justify their decision to cut exposure to these assets and add weight to the other three.