Grayscale dumps Avalanche, Algorand and Synthetix from its funds following Q4 2022 reviews

• Grayscale sold off its Avalanche holdings and rebalanced the Digital Large Cap fund with more BTC, ETH, ADA, SOL and MATIC.
• Grayscale also announced the removal of Algorand and Synthetix from its Smart Contract Platform Ex-Ethereum Fund and DeFi fund, respectively.
• Earlier this week, the Grayscale Ethereum Trust discount climbed to historical highs of 59%.

Grayscale is shaking things up going into 2023, starting with its funds. While some cryptocurrencies are being removed by Grayscale, many others are noting an increase in the proportion. The rebalance based on the 2022 Q4 review comes after both Grayscale Bitcoin Trust and Ethereum Trust registered historic lows in their premium.

Grayscale removes Avalanche

Grayscale announced rebalances to three of its funds, namely the Grayscale Digital Large Cap Fund, the Grayscale DeFi Fund and the Grayscale Smart Contract Platform Ex-Ethereum Fund.

The Digital Large Cap fund comprises of 65% Bitcoin (BTC), 30.7% Ethereum (ETH), 1.8% Cardano (ADA), 1.3% Solana (SOL) and 1% Polygon (MATIC). It previously also held Avalanche, which as per Grayscale’s announcement of January 6, has been sold off and compensated amongst the rest of the assets.

Similarly, Grayscale Smart Contract Platform Ex-Ethereum Fund noted the removal of Algorand from its list of assets which also includes the likes of Polkadot (DOT) and Cosmos (ATOM). Additionally, the Grayscale DeFi Fund was announced to only have six assets now following the removal of Synthetix from the fund.

Grayscale’s decision to do so came days after its Ethereum Trust reported the highest discount to net asset value (NAV) recorded since its inception, touching almost 60%. The trust noted a sudden 30% drop in its premium after the FTX collapse. The bankruptcy of the cryptocurrency exchange also contributed to the Bitcoin Trust’s (GBTC) all-time high discount of 48.89% back in December 2022.

Crypto market remains confined

The total value of all cryptocurrencies combined made a minimal recovery over the last three weeks. The crypto market capitalization has been stuck below the $800 billion mark since mid-December showing no signs of improvement at the time of writing either.

Crypto Fear and Greed Index

The reason behind this remains the persisting fear in the heart of investors that first emerged back in August 2022. The downfall of FTX extended this fear, further resulting in a decline in investor participation.

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