Just-In: Grayscale Launches Smart Contracts Fund For Non-Ethereum Projects

Grayscale Investments said on Tuesday it had launched a fund that tracked smart contract blockchain platforms apart from Ethereum. The fund will largely focus on popular and upcoming projects in the smart contracts space, with nearly half of its weighting made up by Cardano and Solana.

The new fund, called Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE), will track Coindesk’s Smart Contract Platform Select Ex ETH Index, the digital assets manager said.

Grayscale sees growing demand for crypto exposure

The asset manager cited growing investor demand for diversified crypto exposure as the reasoning behind the new fund. It will offer the new fund to individual and institutional traders.

Smart contract technology is critical to the growth of the digital economy, but it’s still too early to know which platform will win. (Through GSCPxE) investors do not have to choose one winner, and instead can access the development of the smart contract platform ecosystem through a singular investment vehicle.

-Grayscale CEO Michael Sonnenshein

Cardano (ADA) and Solana (SOL) will make up about 49% of the fund. Avalanche (AVAX), Polkadot (DOT), Polygon (MATIC), Algorand (ALGO) and Stellar (XLM), will make up the remaining weightage.

Grayscale already has a fund dedicated to Ethereum. This is the firm’s first foray into non-ETH smart contract products.

Smart contracts are a class of program that operate automatically under certain conditions, and are a major factor in DeFi and Decentralized Autonomous Organizations.

Ethereum has also ballooned in popularity this year, ahead of the network’s hotly-anticipated shift to proof-of-stake status.

Move comes amid growing institutional interest in crypto

The fund, which is Grayscale’s 18th offering, highlights the growing presence of asset managers and hedge funds in crypto since late-2020. A large boom in crypto market capitalization last year has been largely attributed to institutional trading.

That momentum has carried over into this year. Recent data showed that nearly all of Bitcoin’s liquidity was comprised of large traders. More recently, Goldman Sachs became the first Wall Street Bank to offer over-the-counter crypto option trades, a product aimed largely at institutional clients.