Grayscale’s new funds will allow people to invest in price movements for the various popular cryptocurrencies. It includes Bitcoin Cash, Ether, Litecoin and Ripple’s XRP, in addition to Bitcoin. The company also runs the Digital Large Cap Fund that allows investment for a combined basket of cryptocurrencies.
Grayscale is adding four new cryptocurrency investment funds on top of the already existing tradable Bitcoin Investment Trust (GBTc) created in 2013. The new funds are named Ethereum Investment Trust, Litecoin Investment Trust, XRP Investment Trust, and Bitcoin Cash Investment Trust. They cover the four mentioned cryptocurrencies.
Still, only U.S.-based qualified accredited investors can invest in these funds. The investors require holding for one year before exiting funds without restrictions.
Managing director at Grayscale Investments, Michael Sonnenshein, told CNBC that cryptocurrencies differ from bonds and stocks in that they require a certain technological prowess to handle. However, with regulatory restrictions in places like China affecting cryptocurrency companies and investors alike, investors can take an easier route to exposure to various cryptocurrencies.
“It is our belief that digital currencies as an asset class has not only arrived but are here to stay. Consequently, we are committing to providing investors with structures that enable them to participate in this exciting asset class”.
These products let traders invest in and trade in the price movements of the said cryptocurrencies without taking a direct position in the virtual currency.
The four operate as trusts that follow a rule-based methodology calculated from the liquidity of the cryptocurrencies in question. Digital currencies are assessing to check if they declines to the 70 percent target of the overall market cap. This will provide an indication of the liquidity of the cryptocurrencies. The four products also differ from the Digital Large Cap Fund that allows investment for a combined basket of cryptocurrencies.
The company is also hoping to launch more products in the future.