Grayscale Digital Currency Funds Trading at Huge Discount to NAV

A bargain or a warning signal? Grayscale manages more than $14.7 billion in assets through its over-the-counter investment vehicles, GBTC being one of them.

The following digital currency asset funds issued by Grayscale are currently running at a discount of 34 to 69% of Net Asset Value (NAV): the Grayscale Bitcoin Trust; Ethereum Trust, Ethereum Classic Trust, Litecoin Trust, ZCash Trust, Horizen Trust, Stellar Lumens Trust, and Livepeer Trust.

Here are the current assets under management:

All of the funds track the performance of their specified “namesake” cryptocurrencies, with the Grayscale Stellar Lumens Trust having the lowest discount to NAV at 34% and the Grayscale Ethereum Classic Trust having the highest discount to NAV at 69%. The BTC and ETH trusts represent the vast majority of these funds, currently totalling $14.4 billion for just those two.

Is Grayscale insolvent? We won’t get a full on-chain disclosure for security reasons, however they do have a letter from Coinbase attesting to the value of their holdings.

This is the double-edged sword behind an OTC product that is not regulated; where GBTC once traded at a premium to spot BTC during the 2021 bull move, it now trades at a discount. Brave traders might be willing to pick up shares at a “discount” if the faith is there that Grayscale will survive into the next Bull run.

The ReadySetCrypto "Three Token Pillars" Community Portfolio (V3)

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The “Three Token Pillars” portfolio is democratically proportioned between the Three Pillars of the Token Economy & Interchain:

CryptoCurreny – Security Tokens (STO) – Decentralized Finance (DeFi)

With this portfolio, we will identify and take advantage of the opportunities within the Three
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The Second Phase of the RSC Community Portfolio V3 was to give us a general idea of the weightings people desire in each of the three pillars and also member’s risk tolerance. The Third Phase of the RSC Community Portfolio V3 has us closing in on a finalized portfolio allocation before we consolidated onto the highest quality projects.

Our Current Allocation As Of Phase Three:

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The “Top Ten Crypto” portfolio is a democratically proportioned portfolio balanced based on votes from members of the RSC community as to what they believe are the top 10 projects by potential.

This portfolio should be much more useful given the ever-changing market dynamics. In short, you rank the projects you believe deserve a spot in the top 10. It should represent a portfolio and rank that you believe will stand the test of time. Once we have a good cross-section, we can study and make an assessment as to where we see value and perhaps where some diamonds in the rough opportunities exist. In a perfect world, we will end up with a Pareto-style distribution that describes the largest value capture in the market.

To give an update on the position, each one listed in low to high relative risk:

SoV/money == BTC, DCR

Platforms == ETH, XTZ

Private Money == XMR / ZEC / ZEN

DeFi == MKR / SNX and stablecoins

It is the most realistic way for us to distill the entirety of what we have learned (and that includes the RSC community opinion). We have an array of articles that have gradually picked off one by one different projects, some of which end up being many thousands of words to come to this conclusion. It is not capitulation because we all remain in the market. It is simply a consolidation of quality. We seek the cream of the crop as the milk turns sour on aggregate.

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