Crypto investment powerhouse Grayscale manages over $24 billion in assets through trusts for Bitcoin, Ethereum, and other major cryptocurrencies.
New filings suggest it’s looking to extend the list: on Wednesday, Grayscale incorporated new trusts for Polkadot (DOT), Aave (AAVE), Monero (XMR), Cosmos (ATOM), EOSIO (EOS), and Cardano (ADA).
According to Delaware’s Division of Corporations, all six of the entities were incorporated yesterday.
Grayscale’s trusts have become a popular way for investors to get exposure to cryptocurrencies without having to trade them directly. They behave a little like traditional ETFs, though they don’t pay out dividends, and there’s a six-month lockup period for all the money you put in. The trusts’ premiums also create opportunities for appealing arbitrage plays.
Coinshares is a digital asset manager offering similar investment vehicles for crypto in the US. And 3iQ and Ninepoint Partners have launched crypto funds in Canada. There’s still no true Bitcoin ETF in the US, though not for lack of trying: the SEC has pushed back on applications from the likes of Gemini, Bitwise Asset Management, and VanEck.
The underlying assets for Grayscale’s newly incorporated trusts may each have their own unique appeal for investors. Polkadot’s DOT token recently became the fourth-largest cryptocurrency by market capitalization; like Cardano (the sixth largest), EOS (the 17th largest), and Cosmos (the 26th largest), it’s a kind of decentralized computing network. Aave is a popular DeFi protocol that enables its users to borrow and lend crypto peer to peer, and Monero is a coin that’s meant to maximize privacy on the blockchain.
The new trusts join several other recent filings from Grayscale, including the Grayscale Chainlink Trust (LINK), as well as funds for Decentraland (MANA), Tezos (XTZ), and the Brave browser’s Basic Attention Token (BAT).
In statements last week, Grayscale CEO Michael Sonnenshein said that these are all “reservation filings”—it isn’t yet known whether the company will actually launch any of the trusts.
“Grayscale is always looking for opportunities to offer products that meet investor demands,” said Sonnenshein of the new trusts. “Occasionally, we will make reservation filings, though a filing does not mean we will bring a product to market. Grayscale has and will continue to announce when new products are made available to investors.”
Grayscale remains the largest crypto investment company, with a substantial lead over its biggest competitor, CoinShares, which currently manages just over $2.9 billion in assets.
01/27/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) January 27, 2021
Grayscale currently offers eight single-asset trusts, as well as a diversified large cap fund; the Grayscale Bitcoin Trust (GBTC) alone represents over $20 billion.