In brief
- Grayscale filed multiple crypto trusts in the registry.
- Technophobic or risk-averse investors can capitalize on booming crypto markets.
- Should ETFs pass go with the US SEC, interest in crypto trusts may wane.
Grayscale has filed more than a dozen alt coin trusts with Delaware’s corporate registry, indicating that it is looking to accommodate for investors’ growing interest in alt coins. Coins on the list include Aave, Cardano, EOS, Uniswap and Polkadot.
The news didn’t pump the alt coin market, which fell in a near-ubiquitous slump yesterday after taking collateral damage from an Elon Musk-prompted Bitcoin crash.
Grayscale reopens ETH Trust
Yesterday, Grayscale also announced that it had reopened its Ethereum Trust for private investors.
The Ethereum Trust, which holds $4 billion, functions just like any of Grayscale’s other trusts: Grayscale warmly welcomes a group of private investors and uses their money to invest in cryptocurrency. Then Grayscale charges them 2% and sells shares in the Trusts on public trading desks.
Trusts like these promise investors ‘auditable ownership [of crypto] through a traditional investment vehicle,’ while keeping crypto pots illiquid and offline in cold storage.
Crypto Trusts: Taking advantage of absent ETFs
This makes Trusts more expensive than the holy grail of publicly-traded Bitcoin: Exchange Traded Funds. However, applications for crypto ETFs on US exchanges have always been rejected by the US Securities and Exchange Commission.
This leads investors who prefer to trade crypto through traditional investment vehicles, with publicly quoted prices and trusted legal counsellors and auditors, toward Grayscale’s trusts, such as the Grayscale’s Bitcoin Trust, which manages $11.5 billion in privately invested BTC assets, or its Ethereum trust, which is marketed to investors looking to avoid “the challenges of buying, storing, and safekeeping ETH directly.”
Companies like VanEck and Valkyrie Digital Assets made fresh attempts to apply for ETFs following the resignation of SEC chair Jay Clayton.