Grayscale Launches Staking-focused Crypto Investment Fund

Grayscale Investments has unveiled a new investment fund called the Grayscale Dynamic Income Fund (GDIC), which is designed for sophisticated clients who want to expose their portfolios to income generated from staking cryptocurrency tokens. This fund is only available to clients with assets under management (AUM) of more than $1.1 million or a net worth exceeding $2.2 million. It aims to convert staking rewards into US dollars on a weekly basis and distribute them quarterly to investors. Grayscale plans to carefully select Proof of Stake (PoS) tokens for the fund’s portfolio, managing the complexity of staking and unstaking different tokens that have individual timelines and requirements.

The primary focus of the GDIC fund is to maximize staking income from the assets, with capital growth being of secondary importance. Crypto staking involves locking up crypto tokens to earn interest or rewards, thereby ensuring the security and efficiency of the blockchain network. Grayscale has identified three PoS tokens for inclusion in the fund: Osmosis (OSMO), Solana (SOL), and Polkadot (DOT). OSMO accounts for 24% of the portfolio, SOL for 20%, DOT for 14%, and the remaining 43% is allocated to other tokens. As per data from Staking Rewards, OSMO currently offers a staking reward rate of 11.09%, SOL stands at 7.42%, and DOT is at 11.9%. It is worth noting that only SOL ranks among the top ten PoS tokens by market capitalization.

Grayscale has faced criticism for its high fees associated with its spot Bitcoin exchange-traded fund (ETF), which was launched on January 11. This has resulted in billions of dollars being withdrawn from the fund. The Grayscale Bitcoin Trust (GBTC) has experienced daily outflows surpassing $14 billion since its launch until March 25. The management fee for Grayscale’s spot Bitcoin ETF is 1.5% per year, five times higher than the average of other spot Bitcoin ETFs, which is 0.30%. Grayscale is navigating regulatory challenges to obtain approval from the United States Securities and Exchange Commission (SEC) for its Ethereum Futures ETF.