In news out yesterday, Grayscale announced that they would be launching a cryptocurrency fund.
If the name Grayscale sounds familiar, it's because they are the ones that created GBTC, the Bitcoin Investment Trust.
It's basically a trust that holds bitcoin and is able to be purchased through most traditional brokerage accounts.
A way for retail and institutional investors to get some exposure to bitcoin without having to go to traditional cryptocurrency markets.
I wrote about it a little here:
This new fund would be similar to GBTC, except that it would expand to offer a basket of cryptocurrencies.
The official release can be seen here:
Basically, Grayscale has created a new fund that will hold the top 5 cryptocurrencies by market cap.
At lauch, the fund will hold Bitcoin, Ether, Bitcoin Cash, Ripple, and Litecoin.
The interesting thing here is that if one of those coins falls by a significant margin, enough to no longer be one of the top 5 coins, it will be replaced within the fund.
The fund will rebalance every quarter to reflect the top 5 cryptocurrencies by market cap.
The current weighting of the fund is as follows:
The downside in all of this?
The fund won't officially launch for another year or so, at least to retail investors.
Right now it is being made available to accredited investors only.
They can buy units in the fund that will be restricted until the fund officially launches in roughly a year's time.
Which means for most people, we are still stuck with the current investment products for the time being.
I'm not sure about you, but this is something I will definitely be adding to my IRA when the time comes.
I imagine the cryptocurrency landscape will be a lot different a year from now, but if things are roughly the way they are now, owning something like this seems like a no brainer.
Not only will it be able to be owned in tax advantaged accounts like IRAs, but it also will actually be backed by the cryptocurrencies themselves, unlike the current futures products that are cash settled and strictly based on the price.
It also takes the fear or losing your wallet keys or being hacked out of the equation.
You can own a cryptocurrency fund via a traditional brokerage account and have the same exposure that you have currently, without many of the risks.
I don't know about you, but I am much more excited about products like this that are actually backed by the underlying asset than something like these rumored ETF's that will be based on the futures products that are cash settled.
In those cases the assets themselves are never even needed. It's like buying a derivative of a derivative.
Keep banging out these awesome products Grayscale!
Stay informed my friends.
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