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Grayscale Investments, the most prominent crypto asset manager, has adjusted its Digital Large Cap (DLC) Fund by divesting from Cardano (ADA) and reallocating the proceeds towards acquiring XRP and other existing assets.
Grayscale officially communicated this move through a press release detailing the fund’s quarterly rebalancing. The rebalancing concerned several of the firm’s investment products, specifically its Digital Large Cap Fund, Smart Contract Platform Ex-Ethereum Fund, and DeFi Fund.
Grayscale’s New XRP Holding
According to the report, Grayscale modified its DLC’s portfolio by liquidating its Cardano holdings. Consequently, the firm diverted the cash returns from the sale to acquire other assets in the fund.
After this rebalancing, XRP makes up 1.73% of Grayscale’s DLC Fund. Notably, Grayscale’s DLC Fund has $570,206,758.29 in assets under management, per record from its official website.
With XRP representing 1.73% of the fund, equivalent to $9,864,576, it suggests that Grayscale holds approximately 16.7 million XRP tokens.
As expected, Bitcoin maintains the largest share of Grayscale’s DLC Fund, accounting for 70.96%. Following Bitcoin, Ethereum (ETH) holds the next significant portion at 21.85%, with Solana (SOL) following at 4.52%.
Meanwhile, Avalanche (AVAX) makes the least composition with 0.95%. Also, as of the end of Q1 2024, the firm has reported no new token additions to its DLC Fund.
XRP’s Re-entry into the GDLC Fund
Notably, XRP re-entered Grayscale’s DLC Fund following the rebalancing of the last quarter of 2023. This move occurred five months after XRP emerged victorious in the legal dispute against the SEC.
Grayscale had previously held XRP in its DLC fund before the SEC contested its classification as a security. This regulatory challenge compelled Grayscale to distance itself from XRP.
With XRP now notably featured in the fund, crypto community members speculate on its potential impact on XRP’s market value, especially considering the firm holds over 16 million XRP.
🚨📈 JUST IN: GRAYSCALE ADDS $XRP BACK INTO “DIGITAL LARGE CAP FUND”! 📈 $XRP will represent 1.73% of DLCF portfolio allocation! 👀💥
Will this new demand have a Bullish impact on $XRP in 2024 ? 🤔💭
Vote Below & Follow For More! 🚀 #CryptoNews #XRP #BullRun2024 #Grayscale… pic.twitter.com/Obw5IqjijD
— Good Morning Crypto (@AbsGMCrypto) April 5, 2024
Notably, the Grayscale Digital Large Cap Fund’s primary objective is to expose investors to some of the most significant crypto assets.
XRP’s return to the GDLC Fund continues to spark speculation regarding Grayscale’s potential launch of an XRP spot exchange-traded fund (ETF).
This speculation is fueled by Grayscale’s recent launch of Bitcoin spot ETFs, with one for Ethereum currently in development. Market participants perceive XRP as the next logical choice due to its clear regulatory standing.