I am old enough to remember when Grayscale started its journey with the drop gold buy Bitcoin campaign with their launch of the GBTC fund, which has done pretty well for them. No shit hey, buy bitcoin and hold who would have thought?
As with retail, institutions who have held bitcoin early feel they are smart enough to pick the next trend and Grayscale moved into shitcoins.
Of course, this is a riskier asset class, with smaller pools of liquidity but with that comes the chance to make a series of smaller bets that allows you to rip the face off the retail click trader.
Grayscale shitcoin funds
Grayscale’s Defi fund, which was launched in July last year, currently holds approximately $8 million in assets, which isn't much all things considered, but when you remember that DEFI TVL is just rehypothecation backed by very little liquidity, having a big player pull out can have wider impacts.
Depending on capital flows and risk profiles, Grayscale will rebalance its fund each quarter in a big way and when they do, it can move those tiny markets in unexpected ways.
Grayscale latest fund rebalancing
Lets take a look at the latest rebalancing where 2 coins have been kicked out with 3 coins added.
01/03/22 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) January 4, 2022
Total AUM: $43.5 billion$BTC $BAT $BCH $LINK $MANA $ETH $ETC $FIL $ZEN $LTC $LPT $XLM $ZEC $UNI $AAVE $COMP $CRV $MKR $SUSHI $SNX $YFI $ADA $SOL $AMP pic.twitter.com/67Pb7xneoQ
Fund rebalancing can leave you as a bag holder
Grayscale recently dumped a few tokens in its DEFI assets across three main investment funds while removing two other assets from its Decentralized Finance Fund as part of this year’s first quarterly rebalance.
Grayscale removed tokens from crypto-derivatives decentralized exchange Synthetix and decentralized exchange SushiSwap. Citing that the the two crypto assets failed to meet the required minimum market capitalization.
Now let's say you are a retail shitcoiner and you see a certain coin moving so you pile in which is usually the case, you think that this is market sentiment but it's actually a fund just allocating an even position.
You mistakenly read the pump for liquidity but it's actually one big buyer who can afford to be price-insensitive to a point. If you fail to read their rebalancing you end up holding that bag with a lot less liquidity around.
Sources:
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