In brief

  • Digital assets management firm Grayscale has increased the weighting of Bitcoin and Ethereum in its Digital Large-Cap investment fund.
  • The change in composition comes at the expense of major altcoins including XRP, Bitcoin Cash and Litecoin.
  • In the two weeks following Bitcoin’s halving in May 2020, Grayscale’s rate of Bitcoin acquisition increased to 153% of all BTC mined.

Digital assets management firm Grayscale has increased the weighting of Bitcoin and Ethereum in its Digital Large-Cap (DLC) investment fund—at the expense of other major altcoins.

Grayscale announced in a Twitter thread on July 12 that the composition of its DLC fund had shifted moving into Q2 of 2020. Between March and June, the percentage of Bitcoin in the fund increased from 81% to 81.5%, while Ethereum’s weighting in the fund increased from 9.6% to 11.7%.

The presence of three other major altcoins in the fund was reduced in the same time period. XRP’s (XRP) weighting dropped from 5% to 3.6%; Bitcoin Cash fell from 2.8% to 2%; and Litecoin’s presence decreased from 1.6% to 1.2%.

Grayscale’s single-asset investment funds for Bitcoin and Ethereum are the largest under the firm’s management, totalling $3.5 billion and $410 million respectively. Comparatively, the single-asset funds for Bitcoin Cash, Litecoin and XRP total less than $12 million between them.

Grayscale’s appetite for Bitcoin

The world’s largest crypto-investment firm signaled a renewed thirst for Bitcoin throughout most of 2020. Prior to the Bitcoin halving event, Grayscale was estimated to be purchasing the equivalent of around half of all Bitcoin mined. In the two weeks after Bitcoin’s halving, Grayscale’s rate of Bitcoin acquisition increased to 153% of all BTC mined in that period. 

By early April, the digital asset investment firm was also shown to be purchasing the equivalent of half of all ETH mined in 2020, eventually coming to own 1.1% of Ethereum’s circulating supply.

It’s conceivable that Grayscale’s re-evaluation of its DLC fund is a reaction to market conditions. Since March 31, the global market dominance of Ethereum increased from 8.17%, to over 9.8% at time of writing. In the same time period, XRP’s market dominance fell from 4.21% to 3.28%. Bitcoin Cash’s dominance decreased from 2.27% to 1.6%. Likewise, Litecoin’s dominance dropped from 1.4% to 1.07%, according to CoinMarketCap.

The only exception to this trend is Bitcoin, the market dominance of which fell from 65.78% from March 31, to 62.46% at time of writing. This could be a result of the recent block reward halving, which resulted in half as many BTC being produced by Bitcoin miners.