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

Summary

Cardano 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.