Grayscale Report Discussion | It’s Still Early For Crypto

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Grayscale Report Discussion

In the market today we are seeing a great amount of red and a slight amount of green on some projects peeking through the turmoil. Overall, a light retracement day and a win for the bears it seems. For the majority of this article, we are going to discuss the recent Grayscale report.

Nothing should be considered investment or financial advice. Enjoy the ride.

Grayscale Report Says Green

Even though the markets are screaming sell and liquidate your portfolio, Grayscale comes to bat with a different story. Recently in late August 2019, Grayscale released their new investor deck which has tons of fun statistics and analytics for people to check out. Most of the statistics are general market overviews that give the impression of a growing industry specifically in the digital asset spectrum.

For those of you who do not know, Grayscale Investments LLC is a digital currency investing services company. In short, they take people’s money and invest it into Bitcoin, Ethereum, and other cryptos. This is traditionally for accredited investors, institutions, and people who have too much money to manage themselves.

Let’s take a look at their AUM and some of the digital assets they invest in at Grayscale. Some of them might surprise you.

This chart came straight from their investor report as of August 2019. We can see that Grayscale has elected to invest in Bitcoin, Bitcoin cash, Ethereum, Ethereum classic, Horizen, Litecoin, Stellar Lumens, XRP, and Zcash. This overall investment vehicle seems to be structured to offer investors a choice of store of value currencies, smart contract based currencies, centralized utility based currencies, and anonymous or privacy based currencies.

From an outside perspective, this trust is very well structured. You have the traditional store of value currency options:

  • A: Bitcoin
  • B: Bitcoin Cash
  • C: Litecoin

And yes, in that order. These currencies are by far going to be the most sought after because of their proven value from time in the market, and the exposure for which they have freely received from such. Following that, an investor can choose their smart contract platform of Ethereum or Ethereum Classic.

  • A: Ethereum
  • B: Ethereum Class

To me personally, this part of the trust is lacking the most. There are multiple new platforms that could be offered here, and given the news on Ethereum classic losing multiple development teams and IOHK, they should really reconsider not listing at least EOS, TRON, Binance Coin, or even Cardano once main net goes live. Granted, most of the coins are still new to the market in general, they should be heavily researching and testing opening trusts for these projects.

Next, we can see there are two main options for centralized utility based currencies.

  • A: XRP
  • B: Stellar

Joking aside, XRP has become less centralized over time as it’s network grows. I can not the say the same for Stellar (XLM) mainly because it’s network is not growing nearly as fast. There might be a slight bit of bias there as well since I know the entire back story of Jeb McCaleb and XRP/XLM controversy.

Finally, there is a surprise that the hedge fund structure of this size actually offers privacy coins. This is probably very appealing to certain individuals, but regardless everything is tracked and documented accordingly. There are 2 main options:

  • A: Zcash
  • B: Horizen

Both projects have solid teams with Zcash being the more well known of the two projects. The only other project I could suggest them to include would be Monero which is a top market privacy coin.

Ironically, Horizen is a fork of Zcash and even helped to develop one of their newer wallets by open sourcing the project. That is the least they could do after stealing the code, right? Actually, I have personally met the founder of Horizen and can say, he is a great guy. Talked with him for for a while in a parking garage on market sentiments when he presented the name change of the project in Atlanta.

The Portfolio

Looking at the investment portfolio, there is a clearly a consistency with the team investing in one project, and then also in the forks of that project. For example, they invest in Bitcoin and Bitcoin cash, a fork of Bitcoin. They also invest in Ethereum and Ethereum classic, a fork a Ethereum. Same with XRP and Zcash. It would seem that if there is compliance or regulatory approval for one asset, it would then in turn translate to another fork or identical project. This could be the reason for the set up, but that is just speculation.

It is Still Early

Another fun chart to look at in this report was the market cap comparison chart.

Looking at this chart is always entertaining because you get to really set a proper frame of reference for how small the digital asset space truly is. The market is incredibly small compared to almost every other market on Earth, most major companies, and even in relativity to just the 2017 bull market.

Is Bitcoin Dead?

Slight rant time. For people that think Bitcoin is dead, will die, or is dying, please just look at the adoption rate, the constant conversations globally by the largest countries in the world, and the infrastructure being built around just Bitcoin alone. This is completely ignoring the other 3,000 digital assets on the market. If even 1% of all digital assets become foundationally market changing projects, that is still 30 projects that you could make a killing on over then next 5 to 10 years.

As always, do your own research and invest with caution. You can never truly know what projects are going to succeed and where the market will turn, but what you can control is how much money you invest, your attitude, and your contribution to the space.

Stay positive, and stay hungry by diving deep into the market resources like Grayscale reports, Binance reports, and as always your Tribe articles. Thanks for reading.

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