The Current State Of The Publicly Traded Grayscale Products

Grayscale Investments is a company managing investment trusts focused around cryptocurrencies. Over time, the value of the Assets under Management (AuM) has risen considerably. Just recently, Grayscale surpassed $6 billion of Assets under Management.

Grayscale offers several publicly traded trusts. These trusts are sold in the secondary market to the public at large premiums compared to the underlying value of the shares (NAV). These trusts are based solely on single assets, and should thus not outperform its underlying asset over time. The excess return should be arbitraged away, so what’s happening?

1. Accredited investors get to invest directly into the trusts at NAV, creating new shares either using cash or cryptocurrency (“in-kind”). These shares are subject to a lockup period before they can be freely traded in the secondary market.

Link copied to clipboard.