Grayscale Investments has added ADA, the native token of the Cardano blockchain, to its Digital Large Cap Fund.
Grayscale, the world’s largest cryptocurrency asset manager, with $29 billion in assets under management, made this announcement in a Tweet.
The company reviews the composition of its Digital Large Cap Fund every quarter as an attempt to rebalance the fund. In April, the fund added Chainlink’s LINK.
The digital asset manager recently announced that it has sold some existing constituents of the fund and used the proceeds to purchase ADA.
Cardano is a proof-of-stake blockchain that was created by Charles Hoskinson, a co-founder of Ethereum. Informed by academic research, Cardano aims to improve upon the scalability, security and efficiency of Ethereum by using a novel proof-of-stake (PoS) consensus mechanism called Ouroboros.
The blockchain just launched its smart contract testnet called Alonzo which puts the blockchain in direct competition with the likes of Ethereum, Solana and Chainlink.
Based on the new composition of the fund, Cardano’s ADA is ranked #3 with a weight of 4.26%. The top 2 in the fund includes Bitcoin with a weight of 67.47% and Ethereum with a weight of 25.39%.
The fund does not generate any income and regularly distributes fund components to pay for its ongoing expenses. Therefore, the amount of Fund Components represented by each share gradually decreases over time.
What they are saying
Edward McGee, Vice President of Finance at Grayscale stated, “We are excited to welcome Cardano to our Digital Large Cap Fund’s portfolio as we work to ensure that our diversified Fund can safely hold assets that collectively comprise 70% of the entire digital asset market. Digital currencies represent a unique opportunity for investors to diversify their portfolios, and at Grayscale, we are proud to provide our investors with access to leading digital currencies through regulated, familiar product offerings.”
What this means
Investors are lining up in anticipation of the Cardano smart contract launch. The smart contract is expected to be more powerful than the Ethereum network, bringing solutions to issues like high gas fees and network congestion that plagues the Ethereum network.
Cardano’s mainnet launch is scheduled for later this year. ADA is trading at $1.36, up 0.95% at the time of writing this report.