Digital Assets: Grayscale’s Digital Large Cap Fund Switches Out Of XRP

January 5, 2021 | Digital Assets, News
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The fund sold all its XRP holdings and bought other crypto fund components.

In continuing bad news for the beleaguered XRP cryptocurrency, Grayscale Investments announced today that it had removed XRP from the portfolio of the Grayscale Digital Large Cap Fund. It said it used the sale proceeds to purchase Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, the other components of the fund. (Decrypt)

Grayscale is the world’s largest digital currency asset manager and manager of the Grayscale Digital Large Cap Fund.

Genesis Global to suspend trading in XRP

Grayscale said it offloaded XRP because Genesis Global Trading, Inc., the Authorized Participant of the fund, announced December 30, 2020, that effective January 15, 2021, it would temporarily suspend trading for XRP.

In circumstances when the Authorized Participant cannot trade or otherwise support a digital asset, the manager is authorized to remove a digital asset from the portfolio of the fund – hence the action, according to Grayscale.

Further, Grayscale attributed the reason to a rebalancing of the fund’s assets after its quarterly review.

In a tweet, Grayscale also said that no other assets qualified for inclusion.

It made no mention of the suit filed by the SEC against Ripple.

Revised weightings

XRP constituted approximately 1.5% of the fund holdings before its sale on January 4.

Post-sale, the holdings were a basket of 81.63% Bitcoin (BTC), 15.86% Ethereum (ETH), 1.08% Bitcoin Cash (BCH), and 1.43% Litecoin (LTC).

There is as yet no clarity on what action, if any, Grayscale is contemplating on its standalone Grayscale XRP Trust – however, the fund suspended fresh subscriptions on December 23.

US exchanges such as Coinbase and Bitstamp have suspended XRP trading given the uncertainties from the SEC’s lawsuit against Ripple.

Binance.US, Crypto.com, and Bittrex have delisted the cryptocurrency.

Digital asset manager Bitwise similarly liquidated $9.3 million from its crypto index fund on December 23 and reinvested the sum in other portfolio assets.

Related Story:   SEC Has Ripple In The Dock; Garlinghouse Fires Back                                               

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