Cardano REMOVED From GrayScales BIGGEST Fund - 9 MILLION Dollars SOLD!

Dapp Central

5 Apr 202410:48

Summary

TLDRCardano has been delisted from Grayscale's Digital Large Cap Fund, which manages over half a billion dollars in assets, due to a quarterly rebalancing based on trading volume rather than price. Despite this, Cardano remains listed on the Smart Contract X Ethereum Fund and has significant backing in other ETP products, including the 21 Shares Cardano-based ETF and the newly launched Cardano Liquid ETP on the Swiss 6 exchange.

Takeaways

📉 Cardano (ADA) has been delisted from Grayscale's Digital Large Cap Fund, which currently manages over half a billion dollars in assets.
🔄 The delisting is part of Grayscale's quarterly rebalancing process, not specifically due to price but rather trading volume.
📊 Cardano's year-to-date performance and trading volume were factors in its removal, with XRP and Avalanche replacing it in the portfolio.
🔄 The rebalancing methodology is based on the CoinDesk Large Cap Select Index Fund, which measures the market cap-weighted performance of the largest and most liquid digital assets.
💹 The selection universe for the fund is calculated using the median daily value traded (MDVT) across eligible exchanges over a 30-day period.
📈 Despite the delisting, Cardano is listed in the Smart Contract ETF, which includes a significant portion of ADA shares.
💰 The Smart Contract ETF has significantly less assets under management compared to the Digital Large Cap Fund, highlighting the impact of the delisting.
🔄 There is potential for Cardano to be relisted in the future if its trading volume increases and meets the fund's criteria.
💼 Other significant ETP products, such as the 21Shares Cardano-based ETF and the Liquid Labs Cardano ETP, continue to be composed of and backed by ADA.
🌐 The Swiss 6 exchange has also listed a Cardano Liquid ETP, which stakes the ADA and provides staking rewards back to investors.
📊 The total assets under management in the various ADA-backed ETP products are a positive sign for Cardano's continued presence in the market.

Q & A

Why was Cardano delisted from Grayscale's Digital Large Cap Fund?
-Cardano was delisted due to the fund's rebalancing, which was not specifically due to price but rather the trading volume Cardano received on larger centralized exchanges.
What was the historical portfolio balance of the Grayscale Digital Large Cap Fund a year ago?
-A year ago, the portfolio consisted of Bitcoin at 67%, Ethereum at about 28%, Cardano at 1.69%, Polygon at 1%, and Solana at 1%.
How has the portfolio balance changed after the rebalancing?
-After the rebalancing, Bitcoin constituted 71%, Ethereum 21%, Solana increased to about 4.5%, XRP and Avalanche were new additions, and Cardano and ADA were removed.
What are the assets under management for the Grayscale Digital Large Cap Fund and the Smart Contract Fund?
-The Digital Large Cap Fund has over $579 million, while the Smart Contract Fund has approximately $4.7 million in assets under management.
How does the CoinDesk methodology for rebalancing the portfolio work?
-The CoinDesk methodology uses the median daily value traded (MDVT) across eligible exchanges over the previous 30-day period and the closing market cap as of the reconstitution reference date to determine eligible assets.
What other ETP products are composed of Cardano (ADA)?
-There is the 21 Shares Cardano-based ETF or ETP with an asset under management amount of $51 million and the Cardano Liquid ETP listed on the Swiss 6 exchange with about $869,000 worth of assets under management.
What is unique about the Cardano Liquid ETP on the Swiss 6 exchange?
-The Cardano Liquid ETP is unique because it stakes the ADA underlying the ETP and provides the staking rewards directly back to the investors of the fund.
How often is the Grayscale Digital Large Cap Fund rebalanced?
-The Grayscale Digital Large Cap Fund is rebalanced quarterly, or four times per year.
What could lead to Cardano being relisted in the Grayscale Digital Large Cap Fund in the future?
-If Cardano's trading volume increases and meets the criteria set by the CoinDesk methodology used for rebalancing, it could potentially be relisted in the fund.
How does the removal of Cardano from the Grayscale Digital Large Cap Fund impact the market?
-The removal has a significant impact as the fund is large, with over half a billion dollars in assets under management. However, Cardano still has other substantial ETP products backing it.
What is the significance of Cardano's listing on the Smart Contract X Ethereum Fund?
-Cardano's listing on the Smart Contract X Ethereum Fund signifies its recognition as a significant smart contract platform. It has a 14.62% share in the fund, which is a positive indicator of its utility and potential growth.

Outlines

00:00

📉 Cardano Delisting from Grayscale's Digital Large Cap Fund

The first paragraph discusses the recent delisting of Cardano from Grayscale's Digital Large Cap Fund, which has over half a billion dollars in assets under management. The video aims to explain why Cardano was removed and explores the possibility of its future relisting. It also mentions other ETP products that include ADA and provides an overview of the Grayscale Digital Large Cap Fund's rebalancing, highlighting the shift in portfolio composition and the reasons behind Cardano's delisting, primarily due to trading volume rather than price performance.

05:01

🔄 Cardano's Portfolio Shift and Methodology Behind Rebalancing

This paragraph delves into the specifics of Cardano's portfolio shift and the methodology used by Grayscale for rebalancing. It explains that the removal of Cardano was part of the quarterly fund rebalancing and provides historical portfolio balance data. The paragraph also discusses the criteria used for asset selection in the Coindesk Large Cap Select Index Fund, which Grayscale follows, emphasizing trading volume and market cap as key factors. It further compares the assets under management in different funds and outlines Cardano's presence in the Smart Contract X Ethereum Fund.

10:02

💡 Other Cardano-Backed ETP Products and Their Impact

The final paragraph focuses on other ETP products backed by Cardano, such as the 21 Shares Cardano-based ETF/ETP and the Cardano Liquid ETP listed on the Swiss 6 exchange. It provides details on the assets under management for these products and contrasts them with the delisted position in the Digital Large Cap Fund. The paragraph also touches on the staking rewards for the Liquid ETP, which are passed directly to investors, and concludes with a brief recap of the main points discussed in the video.

Mindmap

Keywords

💡Cardano

Cardano is a decentralized, open-source blockchain platform that aims to provide a secure and scalable infrastructure for the development and execution of smart contracts and decentralized applications (dApps). In the video, Cardano's recent delisting from Grayscale's Digital Large Cap Fund is discussed, highlighting its impact on the market and the reasons behind the decision.

💡Grayscale

Grayscale is the world's largest digital currency asset manager, offering a variety of investment products that allow institutional and individual investors to gain exposure to digital currencies without directly buying or selling the underlying assets. In the context of the video, Grayscale's decision to delist Cardano from its Digital Large Cap Fund is a significant event affecting Cardano's market presence and investor sentiment.

💡Digital Large Cap Fund

The Digital Large Cap Fund is an investment vehicle managed by Grayscale that tracks the performance of a basket of the largest and most liquid digital assets. The fund undergoes periodic rebalancing to maintain its exposure to the top-performing digital currencies based on specific criteria such as trading volume and market capitalization.

💡Rebalancing

Rebalancing is the process of adjusting the composition of an investment portfolio to maintain an desired balance between different assets. In the context of the video, Grayscale's rebalancing of its Digital Large Cap Fund involves periodically selling and buying assets to ensure the fund remains invested in the most attractive digital currencies based on their performance and trading volume.

💡Trading Volume

Trading volume refers to the total amount of a specific asset that is traded on financial markets over a given period. High trading volume often indicates strong interest and liquidity in an asset, which can influence investment decisions and market sentiment.

💡ADA

ADA is the native cryptocurrency of the Cardano blockchain platform. It is used for transactions and as a means of participating in the network's consensus mechanism, including staking. In the video, the impact of the delisting on ADA's market dynamics and the existence of other investment products that include ADA are discussed.

💡ETP

An Exchange Traded Product (ETP) is a type of security that is traded on stock exchanges, similar to stocks. ETPs can be backed by various types of assets, including cryptocurrencies like ADA, and provide investors with exposure to the price movements of the underlying asset without directly owning the asset.

💡Smart Contract Fund

A Smart Contract Fund is an investment fund that specifically focuses on cryptocurrencies and digital assets that facilitate the execution of smart contracts. These funds can invest in a variety of digital currencies that support smart contract functionality, such as Cardano.

💡Asset Under Management (AUM)

Asset Under Management (AUM) refers to the total market value of the assets that an investment fund, including ETPs and other investment vehicles, manages on behalf of its clients. AUM is an important metric for investors as it provides an indication of the size and scope of an investment manager's business.

💡CoinDesk

CoinDesk is a leading digital media, events, and information services company that focuses on the cryptocurrency and blockchain industry. It provides news, research, and data services to its users, and is known for its indices and rankings in the crypto space.

💡Market Capitalization

Market Capitalization, often abbreviated as 'market cap,' is the total value of all outstanding shares of a publicly-traded company or, in the case of cryptocurrencies, the total value of all the units of a particular digital currency. It is calculated by multiplying the current price of the asset by the total number of outstanding units.

Highlights

Cardano has been delisted from Grayscale's Digital Large Cap Fund, which manages over half a billion dollars in assets.

The delisting is part of Grayscale's rebalancing process for the last quarter.

Cardano's removal was not due to pricing but trading volume.

Grayscale's methodology for rebalancing is based on the trading volume of digital assets.

Cardano's year-to-date performance was a factor in its removal from the fund.

The historical portfolio balance included Bitcoin, Ethereum, Cardano, Polygon, and Solana.

The current portfolio value shows Bitcoin, Ethereum, Solana, XRP, and Avalanche.

Cardano is listed on the Smart Contract X Ethereum Fund, which includes a variety of smart contract platforms.

The assets under management for the Grayscale Digital Large Cap Fund is over $579 million.

The Smart Contract Fund has approximately $4.7 million in assets under management.

The difference in assets under management between the two funds is significant, with the Large Cap Fund being almost 150 times larger than the Smart Contract Fund.

Cardano's theoretical 1.69% share in the Large Cap Fund equates to around $9.7 million being held in ADA.

The hope is that with increased trading volume, Cardano may be relisted in the future.

The rebalancing is expected to shift as the digital asset space grows and new leaders emerge.

The CoinDesk Large Cap Select Index Fund measures the market capitalization performance of the largest and most liquid digital assets.

The selection universe for the fund is calculated using the median daily value traded (MDVT) across eligible exchanges over a 30-day period.

Assets in the selection universe must also have a determined closing market cap as of the reconstitution reference date.

21 Shares has a Cardano-based ETF or ETP, which is 100% physically backed by ADA and has $51 million in assets under management.

The Swiss 6 exchange has listed the Cardano Liquid ETP, which has $869,000 worth of assets under management and provides staking rewards back to investors.