Grayscale Launches Staking-Based Crypto Fund

Grayscale Investments, a cryptocurrency asset management firm, has announced the launch of an investment fund where income will be generated through staking digital currencies.

As we’ve built our product family, we’ve only ever incorporated passive strategies. This week, that changes.
Meet Grayscale Dynamic Income Fund (GDIF), our first actively managed investment product, focused on multi-asset staking. Here’s how it works: (1/5) pic.twitter.com/oJEAskutXG

— Grayscale (@Grayscale) March 5, 2024

The structure will be operated by a subsidiary, Grayscale Advisors.

To select the assets supported by the Grayscale Dynamic Income Fund (GDIF), the firm used “qualitative and quantitative factors,” including staking rewards, market capitalization, and liquidity.

Initially, the fund’s portfolio consists of nine tokens: Aptos (APT), Celestia (TIA), Coinbase Staked Ethereum (CBETH), Cosmos (ATOM), Near (NEAR), Osmosis (OSMO), Polkadot (DOT), SEI Network (SEI), and Solana (SOL).

Income distribution and rebalancing are planned to occur quarterly.

“As our first actively managed fund, GDIF is an important expansion of our product line, allowing investors to participate in multi-asset staking with the convenience and recognition of a single investment vehicle,” said Grayscale CEO Michael Sonnenshein.

Participation in the fund is available only to qualified investors. This category of market players in the US can invest in products that have not yet received approval from the SEC.

“GDIF aims to optimize income in the form of staking rewards, with capital appreciation from such investments being a secondary goal,” noted Grayscale. 

The most popular asset among stakers is Ethereum, with the market capitalization of locked coins reaching $120 billion. This volume of 31.5 million ETH constitutes 26% of the total issuance.

However, the cryptocurrency lags behind several competitors like Sui, with nearly 83%. Staking rewards for many projects are also higher. For instance, Solana offers 7.3% annually compared to 4.4%.

As reported, Grayscale experts stated that Ethereum will “mature” following the Dencun upgrade, which will reduce fees and increase network scalability.

Blockchain developers have scheduled the upgrade for March 13.