Grayscale, a firm established in 2013 touting itself as a “trusted authority on digital currency investing”, introduced four cryptocurrency-related investment funds functioning as trusts that adhere to a rule-based methodology. The funds are called Bitcoin Cash Investment Trust, which covers Bitcoin Cash; Ethereum Investment Trust, which covers Ether; Litecoin Investment Trust, which covers Litecoin; and XRP Investment Trust, which covers Ripple virtual currencies. Grayscale’s main focus is to maintain the cryptocurrencies’ liquidity by assessing each digital currency quarterly in order to determine if any of them declined to the targeted 70% total market cap in virtual currencies – a factor that indicates how liquid a cryptocurrency is.
According to Grayscale Investments’ Michael Sonnenshein, digital currencies can not be compared to stocks and bonds as one needs specific technological knowledge in order to properly “handle” them. However, he explained that the new crypto funds launched by Grayscale would make the process easier. Sonnenshein described the trusts as “something that people can really wrap their heads around.” He claimed that since the funds’ launch, demand for it was “fantastic”. He added, “We’re continuing to break records all the time.”
Grayscale created the Bitcoin Investment Trust or GBTC as a way for investors to trade bitcoin without having to place direct investments on the virtual currency. The firm currently has $2.1 billion assets under management in 8 different products. Grayscale intends to launch more new funds in order to expand its worldwide customer base. The four recently launched funds are an addition to the multiple crypto investment Digital Large Cap Fund previously launched by Grayscale the past month. The latter offers an investment medium for a mixture of cryptocurrencies while the former concentrates on individual digital currencies. Sonnenshein believes that virtual currencies are “here to stay”. He added, “Consequently, we are committed to providing investors with structures that enable them to participate in this exciting asset class.”