Grayscale has quietly positioned itself in these currencies! An overview of its four major private placement funds.

As one of the earliest asset management companies to delve into the blockchain field, Grayscale's industry sensitivity is worth learning from. In fact, in addition to single-asset trust funds, Grayscale has also introduced actively managed funds for private placement. Although these products are difficult for the general public to access, we can consider them as the cryptocurrencies that Grayscale is bullish on in their respective fields.

Grayscale Digital Large Cap Fund: Avoiding Meme Coins

The Grayscale Digital Large Cap Fund is one of the first securities to individually invest in a basket of large-cap digital assets and derive value from them, established as early as February 2018. The fund holds digital assets in a market-cap-weighted manner, focusing on assets with the largest market capitalization, strongest liquidity, and meeting specific trading and custody requirements. Currently, the fund manages assets totaling $4.9 billion.

The largest component of the fund is Bitcoin, accounting for 75%. This is followed by Ethereum at 17.9%. Solana, Ripple, and AVAX follow with 4.13%, 1.86%, and 0.65% respectively.

While the selection of coins is understandable, comparing it to data from Grayscale's data source Coindesk shows that Grayscale has skipped over several coins based on market capitalization, such as BNB, DOGE, TRON, TON, ADA, SHIB, and others. This leads to speculation on the logic behind the coin selection of the fund, where meme coins like DOGE and SHIB are excluded. Coins like BNB, TRON, and TON face regulatory concerns, similar to Ripple. ADA's exclusion remains unclear, indicating potential considerations beyond market capitalization and circulation.

SEC Appeals Ripple Case, XRP Drops 11%

Grayscale Decentralized Finance Fund: Ethereum Dominance, Other Chains Lack Appeal?

Another Grayscale decentralized finance (DeFi) fund doesn't offer many surprises. 51% of the assets are in Uni, despite Uniswap facing challenges from the SEC. Additionally, 22% is allocated to the lending protocol AAVE, while Sky, formerly known as the stablecoin protocol Maker, accounts for 12.7%. There's also 9.3% in the liquidity staking protocol token Lido, and 4.5% in the derivatives liquidity protocol SNX.

Looking at the Total Value Locked (TVL), Lido's dominance in liquidity staking protocols within the Ethereum ecosystem remains unchallenged amidst competition. However, it's observed that Grayscale's DeFi fund solely focuses on the Ethereum ecosystem, showing little interest in DeFi protocols on other public chains. This observation is confirmed in Grayscale's Q4 report, where Grayscale removed the leading DeFi protocol in the Solana ecosystem, Raydium.

Grayscale Adds 6 New Coins to Top 20 List, Bullish on Next Quarter Performance

ADA Forever? Grayscale Smart Contract Platform Fund Holds Established Public Chains

Next is the Grayscale Smart Contract Platform Fund, formerly known as the Ethereum Fund. The fund is described as one of the first securities to individually invest in native tokens of emerging smart contract platforms and derive value from their prices, although it doesn't mention whether it will earn rewards from staking tokens on PoS public chains.

The fund holds assets with 66% in Solana, marking a milestone for Solana's institutional adoption. This is followed by 12% in ADA Cardano, showing ADA's presence despite its subdued price and ecosystem activity.

VanEck Prices Solana Fairly at $330, Calls for Institutions to Hold SOL

Following that is 10.5% in AVAX, an older public chain that has been relatively quiet despite efforts to provide fast, stable, and cost-effective network services. AVAX is divided into X-Chain Exchange Chain, P-Chain Platform Chain, and C-Chain Contract Chain, with most users interacting with the C-Chain. Perhaps the chain's gaming version in the future could revitalize AVAX.

Lastly, there's 6.13% in Polkadot and 5.35% in NEAR. Polkadot, designed by Ethereum's co-founder Gavin Wood, is a Layer 0 public chain. While users may not be familiar with Polkadot, many have used public chains built on Polkadot to some extent.

NEAR is considered an AI concept chain due to its founder's background in the AI field. NEAR's presence is also noted in Grayscale's Q4 report.

Integration of Artificial Intelligence and Blockchain: Grayscale Decentralized Fund

The most talked-about topic in the blockchain industry this year is the integration of AI and blockchain. It can be said that the largest funding this year is related to AI, as explained in our previous articles on why VCs favor such topics. This topic may have a relatively high entry barrier, so let's see how Grayscale views the related fields.

Birth of Billion-Dollar Valued Startups! Why Are Venture Capital Firms So Fond of Artificial Intelligence?

The Grayscale Decentralized Artificial Intelligence Fund is the newest fund launched this year, focusing on the integration of artificial intelligence and blockchain technology. This fund is the most diversified in terms of asset holdings, with the largest holding being TAO Bittensor at approximately 29.5%. TAO, with a total supply of 21 million coins and a halving design, is dubbed the AI Bitcoin. TAO's main business focuses on machine learning and AI model training.

Following that, NEAR and FIL Filecoin hold approximately 29.15% and 16.68% respectively. Filecoin is a decentralized storage network that provides decentralized cloud storage services. Unlike traditional cloud storage providers like Amazon and Google, Filecoin utilizes blockchain technology to allow users to lease out unused storage resources or use them for data storage. Investigating further, the investors behind Filecoin include DCG, CoinDesk, and Grayscale's parent company.

With a 14% share, RENDER's primary business is in decentralized GPU rendering markets, with its price rising over 300% from the beginning of the year to its all-time high. The Graph, accounting for 10.55%, is a decentralized data indexing and query protocol primarily used for decentralized applications (dApps) on blockchains like Ethereum. GRT is the native token of the protocol, serving as part of the economic incentive mechanism. The Graph aims to make dApps more efficient in accessing blockchain data, reducing the barriers and costs of data queries.