Odaily Frontline | Report: Grayscale Bitcoin products underperformed the spot market in October

念银思唐

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2020-10-20 21:31 (UTC+8)

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GDLC has lost 19.9% over the past 30 days.

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GDLC has lost 19.9% over the past 30 days.

This article comes fromDecrypt, original author: Jeff Benson

Odaily translator |

Summary:

This article comes from

, original author: Jeff Benson

Odaily translator |

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- The Digital Large Cap Fund (GDLC) is down 19.9% over the past 30 days.

Its most popular product, Grayscale Bitcoin Trust, saw inflows of $719.3 million in the third quarter, while total Bitcoin assets under management (AUM) rose 147% in 2020. Crypto products other than Bitcoin Trust accounted for 31% of the total investment of $1 billion. Grayscale’s LTC and BCH trust funds and the “Large Cap Fund” both saw quarterly inflows up 1,400%.

The firm said 81% of investments in the third quarter came from institutional investors and 57% came from investors investing in multiple products. This reflects broadening investor interest in crypto assets other than bitcoin.

- Despite this, Grayscale still has the highest market capitalization and daily trading volume of crypto ETPs.

Despite inflows of more than $1 billion between July and September, digital asset manager Grayscale's October performance was rather lackluster.

According to the latest Digital Asset Management Review published today by CryptoCompare, “Grayscale’s products have generally underperformed compared to the market.”

Exchange-traded products (ETPs) are investments whose price depends on the value of the underlying product, in this case a cryptocurrency. They are popular with investors who want exposure to such assets without the responsibility of owning and storing them.

While ETPs are supposed to track the price of the underlying asset, their price movements can vary because ETPs can trade at a premium or discount.

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In the past 30 days, the performance of Grayscale's main products and several indices, image source: CryptoCompare

Nevertheless, the products of ETC Group and Wisdom Tree outperformed Grayscale in October.

In fact, ETC Group and WisdomTree's ETPs have outperformed the spot market over the past 30 days, gaining 7.7% and 7.3%, respectively, compared to the spot market's 6.6% gain. This means that, despite the fees (consumers pay ETP providers for storage), the returns on these funds are higher than what investors would get by putting their money into actual cryptocurrencies.

Meanwhile, Grayscale’s Bitcoin Trust and Ethereum Trust are up 3.0% and 3.4%, respectively, over a 30-day period, with the former underperforming the market and the latter outperforming.

“Greyscale’s ETH/USD trust product underperformed over the entire 30-day period, underperforming its equivalent CCCAGG ETH/USD spot price by 10%,” CryptoCompare wrote in the report. Appreciating, its returns (up to 16%) in the second week of October outperformed the market again."

However, Grayscale's diverse offerings have not improved. The Grayscale® Digital Large Cap Fund (ticker: GDLC), which is tied to the prices of BTC, ETH, XRP, BCH and LTC, fell 19.9%. Unlike single-asset trusts, GDLC funds use a "rules-based portfolio construction process," which means that its allocation ratios vary.

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