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Grayscale Investments launched a new fund to receive exposure to smart contracts platforms through a market-capitalization portfolio that will track the CoinDesk Smart Contract Platform Select Ex ETH Index. The new fund will be the 18th investment product of the company.
Smart contracts are the backbone of the modern crypto economy as they act as automatic programs run on blockchains. Developers build all their decentralized solutions on the technology since it allows the automatic execution of certain conditions in a decentralized manner.
Arman ShirinyanWith the help of smart contracts, such solutions as DeFi apps, NFTs, IDOs and others were created in 2021 only. The total worth of the industry may exceed trillions of U.S. dollars.
In 2021, the demand for the DeFi and NFT industry increased exponentially with the capitalization of such projects as Ethereum, Solana and Cardano skyrocketing by over 100%. Such vigorous growth reflected the existing trends on the market.
The new fund will make it possible for institutional investors to follow the trend by being exposed to such projects as Solana, Avalanche, Polygon and others. Cardano got the biggest weighting of the fund with 24.63%, while Solana came in second place with 24.27%. The distribution reflects CoinDesk's index.
As the Grayscale CEO Michael Sonnenshein noted, investor demand for diversified exposure to alternative cryptocurrencies increased since 2021 and noted that smart contract technology is critical to the growth of the digital assets industry despite being relatively young.
The major advantage of GSCPxE for investors would be exposure to the development of the entire ecosystem instead of a few projects that function within it. The primary target of the new investment vehicle will most likely be institutional investors that are looking for the aforementioned kind of exposure, similar to the GBTC fund.
Alex Dovbnya
Vladislav Sopov
Dan Burgin