GrayScale Launches A New Fund Focused On Ethereum Competitors
Grayscale’s new fund provides weighted exposure to seven smart-contract crypto assets – not including Ethereum (ETH), the leading smart contract platform.
The asset management company announced the launch of the Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE), saying that new offering as a fund provides exposure to a selection of industry-leading smart contract platforms.
The new fund is weighted as follows: Cardano (24.63%), Solana (24.27%), Avalanche (16.96%), Polkadot (16.16%), Polygon (9.65%), Algorand (4.27%), and Stellar (4.06%).
Michael Sonnenshein, the chief executive of GrayScale explained that the firm launched the fund to allow investors to diversify across multiple smart contract blockchain in what’s become an increasingly competitive market.
He commented:
“Smart contract technology is critical to the growth of the digital economy, but it’s still too early to know which platform will win—from attracting and retaining the most vibrant developer communities, to ensuring the platform is high-speed, flexible, and scalable.”
2021 was a big year for Ethereum. As the crypto market boomed, Ethereum was quick to rise due to the popularity of the fast-growing NFT ecosystem and the launch of its crucial EIP-1559 fee burning update.
However, 2022 appears to be even bigger year for ETH due to the much-awaited plan to merge the blockchain from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
But, increasingly expensive ETH gas fees and big developments on other networks paved the way for other Layer 1 smart contract blockchains to eat some of Ethereum’s market share.
The new GSCPxE will track the CoinDesk Smart Contract Platform Select Ex ETH Index.
According to Jodie Gunzberg, CFA, Managing Director, CoinDesk Indices, investors have an appetite for alternative smart contract networks following Ethereum’s breakout in 2021.
She explained:
“Many investors allocated to ETH given its explosive growth over the past year, so now there is demand to get exposure across the rest of the Smart Contract Platform sector.”
The new fund is Grayscale’s 18th investment product and third diversified fund offering. Its flagship product GBTC is a fund designed to give institutional investors exposure to the top crypto asset.
Last year, Grayscale filed an application with the SEC to convert GBTC to an exchange-traded fund. It’s since launched a campaign to encourage would-be investors to convince Grayscale to approve the application. The SEC has rejected all previous applications for a spot Bitcoin fund, but have not decided on Grayscale’s application, as of yet.
