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Grayscale sets sights on institutional DeFi fund

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Grayscale Investments has announced the creation of the Grayscale DeFi Fund focused on Decentralized Finance (DeFi) tokens.

Grayscale CEO Michael Sonnenshein said the fund will enable private and institutional accredited investors to gain access to leading DeFi tokens. Without the need to make an outright purchase.

The fund’s basket expected to include a wide range of DeFi tokens, including Uniswap (UNI) and Aave (AAVE).

This is already the fifteenth Grayscale product related to cryptocurrency investments. Among other things, Grayscale offers funds based on cryptocurrencies such as Bitcoin and Ethereum. As well as a large-cap digital asset fund.

“We are ready to provide clients with reliable and secure access to the digital asset ecosystem. The emergence of decentralized finance protocols clearly demonstrates how the future of the financial industry can change. We believe there is a bright future ahead with the adoption of DeFi”, Sonnenshein said.

The launch of the new fund driven by the increasingly attractive DeFi market for large companies. Grayscale plans to launch the fund on the secondary market. But there are no guarantees that the initiative will be successful.

This could be influenced by many factors, including the actions of the US Securities and Exchange Commission (SEC) and the Financial Institutions Regulatory Agency (FINRA), said CEO of Grayscale.

Converting Grayscale Bitcoin Trust (GBTC) to Bitcoin ETF

Sonnenshein also spoke about other investment instruments in cryptocurrencies. He hopes that US regulators will soon approve the launch of tradable exchange-traded funds (ETFs) on Bitcoin. The company has previously expressed its willingness to convert the Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF following the SEC’s consent.

To date, no Bitcoin ETF in the US has received the green light. However, Sonnenshein suggests that the Securities and Exchange Commission (SEC) will eventually approve Bitcoin once the cryptocurrency market matures.

The CEO of Grayscale noted that the Bitcoin ecosystem has had to constantly face various challenges over the past years, and the ban on mining in China has led to a more even distribution of computing power in the world. He urged not to overestimate the short-term volatility in the Bitcoin market and focus on the medium or long term when buying cryptocurrency.

DeFi token price tracking

The new CoinDesk DeFi Index will be used to track the prices of DeFi tokens. It was created by TradeBlock, which was one of the first to develop the XBX Index for tracking Bitcoin in 2014. In January, cryptocurrency publication CoinDesk announced the acquisition of TradeBlock, but the amount of the transaction remains unknown.

“This partnership with Grayscale proves our leadership in building digital currency indices at the institutional level. Given the increased interest in DeFi, it is important for investors to have the data and tools to help diversify their investment portfolio with decentralized finance”, said Jodie Gunzberg, Managing Director of CoinDesk Indexes. According to Grayscale, in the IV quarter of 2020, investors invested about $ 3.3 billion in the company’s cryptocurrency funds. In March this year, Grayscale launched five new funds for BAT, LINK, MANA, FIL and LPT cryptocurrencies.

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