Grayscale Investments, the world’s leading crypto asset manager, tweaked its flagship Digital Large Cap Fund (DLC Fund). The shakeup has seen Cardano (ADA) exit the basket, with its allocation going towards Ripple’s XRP and existing assets.
This news, officially announced through a press release, comes as part of Grayscale’s routine quarterly review process. The rebalancing impacted several of their investment vehicles, including the DLC Fund, Smart Contract Platform Ex-Ethereum Fund, and DeFi Fund.
XRP Makes a Grayscale Comeback
The most significant change within the DLC Fund involved the departure of Cardano and the return of XRP. Grayscale liquidated its ADA holdings and channeled the freed-up capital towards acquiring more XRP and other assets already present in the fund. Following the reshuffle, XRP now represents 1.73% of the DLC Fund’s total holdings, translating to roughly 16.7 million XRP tokens based on the fund’s current value of $570 million.
Bitcoin unsurprisingly remains the dominant force within the DLC Fund, comprising a whopping 70.96%. Ethereum (ETH) follows at a distant second with 21.85%, while Solana (SOL) occupies the third position with 4.52%. Avalanche (AVAX) rounds out the fund with a minor 0.95% stake. Notably, Grayscale hasn’t incorporated any new tokens into the DLC Fund since the end of Q1 2024.
Also Read: Uphold Unveils New Crypto Basket (XRP Included) Targeting $2 Trillion Financial Blockchain Sector
XRP’s Re-emergence and Potential ETF Implications
This rebalancing marks XRP’s second stint within Grayscale’s DLC Fund. The token’s reintroduction comes just five months after Ripple’s successful legal battle against the SEC regarding XRP’s classification as a security. Prior to this legal victory, regulatory uncertainties prompted Grayscale to remove XRP from its holdings.
With XRP back in the fold and Grayscale boasting a significant holding of over 16 million tokens, speculation abounds within the crypto community regarding the potential impact on XRP’s market value. The Grayscale DLC Fund, designed to provide investor exposure to leading crypto assets, could potentially influence XRP’s price.
Furthermore, XRP’s return to the DLC Fund reignites discussions about a potential Grayscale XRP spot exchange-traded fund (ETF). This speculation stems from Grayscale’s recent launch of Bitcoin spot ETFs and their ongoing development of an Ethereum spot ETF. Given XRP’s seemingly clarified regulatory status, many market participants view it as the next logical candidate for a Grayscale ETF offering.
Only time will tell how this strategic shift by Grayscale will play out for XRP and the broader crypto market. However, one thing is certain: Grayscale’s move has sparked a renewed wave of interest and speculation surrounding XRP’s future.
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