Grayscale Removes Cardano and Cosmos from Multi-Asset Funds in Quarterly Reshuffle

Grayscale, a prominent crypto asset management firm, has removed Cardano (ADA) and Cosmos (ATOM) from its multi-asset funds during its quarterly rebalancing. The adjustment aligns with CoinDesk's recent industry sector indices rebalancing, resulting in changes to the weightings of fund components. Consequently, Cardano was divested from the Grayscale Digital Large Cap Fund (GDLC), while ATOM was removed from the Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE).

Grayscale Drops Cardano, Cosmos from Multi-Asset Funds in Quarterly Rebalancing

In a significant move, prominent crypto asset management firm Grayscale has removed two high-profile digital assets, Cardano (ADA) and Cosmos (ATOM), from its multi-asset funds as part of its quarterly fund rebalancing.

According to a press statement released by Grayscale on April 4, the firm removed Cardano from its Grayscale Digital Large Cap Fund (GDLC) and Cosmos's ATOM token from the Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE).

Reasons Behind Grayscale's Decision

Grayscale attributed the changes to CoinDesk's recent rebalancing of its industry sector indices. The firm explained that the components and weightings of each asset are determined according to each index's methodology and are subject to change without notice.

In the case of GDLC, Cardano was sold off, with the proceeds reinvested in other fund components based on their weightings. The fund's current weightings include over 70% Bitcoin, 21.84% Ethereum, 4.52% Solana, and less than 3% in XRP and Avalanche.

Similarly, Cosmos was divested from GSCPxE, and the proceeds were utilized to acquire other fund components in proportion. As such, the fund has shifted in its weightings, now encompassing 58.4% of Solana, 14.56% Cardano, 12.25% Avalanche, 8.53% Polkadot, and 6.25% Polygon.

No New Additions to DeFi Fund

Notably, no new tokens were added or removed from the DeFi Fund, which consists of 48% of Uniswap, 20.41% of MakerDAO, and 13.17% of liquid staking protocol Lido. The lending platform Aave holds 9.99% of the funds, and Synthetix holds 7.69%.

Market Impact

The news of Cardano and Cosmos's removal from Grayscale's funds has had a noticeable impact on their respective prices. ADA and ATOM have faced notable declines during the past day, corresponding with the broader crypto market struggles during the reporting period.

According to CryptoSlate's data, the top two digital assets, Bitcoin and Ethereum, recorded losses of 0.61% and 3.66%, respectively. Similarly, Cardano's ADA and Cosmos's ATOM fell by approximately 4% to $0.56 and $10.7, respectively, continuing a downward trend that has seen them shed double-digits during the past month.

Meanwhile, other large-cap assets like Solana and Avalanche's AVAX saw bigger losses, plunging by more than 5% during the reporting period.

Conclusion

Grayscale's decision to remove Cardano and Cosmos from its multi-asset funds underscores the firm's focus on aligning its offerings with the evolving crypto market landscape. The firm's quarterly fund rebalancing serves as an opportunity to optimize its portfolio based on industry sector indices and investor demand.

While the removal of ADA and ATOM may disappoint some investors, it is a strategic move that reflects Grayscale's commitment to providing its clients with the most competitive and diversified investment options in the digital asset space.