Grayscale Investments, the world’s largest digital asset manager with $2.1 billion in assets under management, has received approval from the Financial Industry Regulatory Authority (FINRA) to issue shares to the general public of its Digital Large Cap Fund (DLC). The fund is comprised of different cryptocurrencies and is similar to an exchange-traded fund.
According to the company’s announcement, this is the first publicly-quoted security in the US tied to a “diverse selection of digital assets.”
“DLC has offered a private placement to accredited investors since February 2018. As of September 30, 2019, there were 3,194,900 shares outstanding of DLC.
Shares created through DLC’s private placement become eligible to sell into the public market after a statutory one-year holding period under Rule 144 of the Securities Act.
There will be no trading volume in the shares’ public quotation until the shares are DTC eligible, which GDLC is expected to receive soon. Investors will be able to buy and sell freely tradable DLC shares through their investment accounts in the same manner as they would other unregistered securities.”
As of September 30th, the DLC fund was comprised of about 80% Bitcoin, 10% Ethereum, 6% XRP and 2% each of Bitcoin Cash and Litecoin. Shares were valued at $5.19, as of October 11th.
Grayscale’s “Drop Gold” campaign, which launched earlier this year, contributed substantial inflows in Q3. The company reports a surge in investments, rising from $85 million in the previous quarter to $254.9 million. 84% of the new funds came from hedge funds and other institutional investors.
Despite recent declines in digital asset market prices, hedge funds are pouring money into Grayscale’s products which have marked their strongest performance since the firm’s inception. The record inflows show a strong demand from institutional investors who want exposure to cryptocurrencies and can invest amidst regulatory uncertainty without having to hold the assets directly.
The third quarter report also shows that the majority of the investors purchased Grayscale shares using cryptocurrency instead of cash, primarily using Bitcoin for shares in the company’s Bitcoin trust.
You can check out the full report here.
