Reviewing the last Bull Market 'Grayscale Effect': 14 tokens with a return rate of over 200%, significantly influenced by market cycles

Author: Nancy, PANews

In recent times, with the surge in the prices of coins such as SUI and ZEN, the 'Grayscale effect' has reappeared and Grayscale holdings have become one of the market's investment indicators. So, how well do Grayscale's selected cryptocurrencies perform in terms of investment returns? This article from PANews reviews the market performance of 14 tokens involved in Grayscale's cryptocurrency trust funds in the last bull market cycle, covering the period from March 2021 to March 2022.

Average return exceeds 200%, with significant market cycle impact

During the last bull market, Grayscale launched 14 cryptocurrency trust products through the OTC market, DeFi funds DEFG and GSCPxE fund, which were gradually opened over a period of about a year. From the time of product launch, Grayscale began to launch related token funds at the beginning of the bull market, and accelerated the layout frequency in the middle and later stages.

In terms of investment return, the average highest increase of these 14 tokens after being launched by Grayscale is 204.8%. Among them, LPT, LDO and BAT have particularly outstanding gains, reaching 1497.1%, 292.6% and 239.8% respectively. In contrast, SOL, DOT and SNX have gains far below the average level.

In terms of the time required for the investment to generate returns, the average cycle for 14 tokens to reach a new high is 84.4 days. Among them, BAT, MANA, and LPT require a longer period, mostly over 250 days, but the returns are relatively high. On the other hand, SOL, FIL, AVAX, and DOT reached new highs in a shorter period, but their gains are relatively limited, as this period is in a market adjustment phase after Bitcoin's new high. This phenomenon not only indicates that in general, the longer the holding period during a bull market, the higher the advantage of the holding return, but it is also related to the time of product launch. In the past, the rising cycle of the sector showed that most public chains were the first targets of the bull market, and most of these projects launched by Grayscale achieved good gains in the early stage, leading to limited upside potential in the later stage.

However, this difference is also influenced to a certain extent by changes in market cycles. Specifically, the average increase in the token funds launched by Grayscale in the early bull market of 2021 was 446.8%; while in the mid-term bull market from April to November 2021, the increase dropped to 85.4%; and during the market correction period in March 2022, the increase of the launched tokens was only 40.3%. Therefore, it can be seen that Grayscale's investment return rate is greatly affected by market cycle fluctuations and exhibits obvious cyclical characteristics.

In this respect, although grayscale's cryptocurrency trust products have provided considerable returns during bull markets, their performance is significantly affected by market fluctuations. Therefore, investors should fully consider the overall market trends when making investment decisions.

Participate in multiple token explosions, expand the range of investment products

In recent times, the prices of multiple tokens have shown strong performance, and Grayscale's layout may play an important role in driving market trends.

For example, XRP, which broke through a new high for many years. In September of this year, Grayscale announced that it would relaunch the first U.S. XRP trust fund and officially open it to eligible investors in the near future. It is worth noting that as early as January 2021, Grayscale removed the XRP trust fund and liquidated the tokens it held due to the Ripple legal dispute. This change is also interpreted by the outside world as paving the way for a potential XRP spot ETF, and the price of XRP has continued to rise in the months following, indicating a positive market response to Grayscale's move.

SUI's price has also been very strong in the past few months. Several months ago, Grayscale updated its investment strategy and announced the Top 20 tokens expected to rise significantly by the end of 2024, including 6 new tokens such as SUI and TAO. At the same time, Grayscale also started investing in SUI, announcing the launch of GrayscaleSuiTrust in August this year, which is now officially open to qualified investors.

Another token worth paying attention to is ZEN, which has also seen a significant increase in price, with a growth of about 215% in the past 30 days. After increasing its holdings of ZEN tokens recently, Grayscale has also announced the submission of the Grayscale Horizen Trust (ZEN) 8-K form to the SEC, allowing investors to gain exposure to ZEN tokens in the form of securities.

In addition to the above projects, Grayscale also provides legitimacy and recognition for more encrypted assets. On December 24th, Grayscale announced the private placement of 22 cryptocurrency trust products, including mainstream tokens such as AAVE, AVAX, LINK, SOL, XRP, as well as fund products in sub-sectors such as DeFi, AI, etc., for accredited investors to subscribe based on net asset value (NAV). The products opened this time cover Grayscale Decentralized AI Fund, Grayscale Decentralized Finance Fund, and single-asset trusts of emerging protocols such as Bittensor, Lido DAO, Optimism, etc.

In addition, Grayscale is further accelerating its business expansion and seeking more professional talents to cope with the increasingly complex market demand. Earlier this month, Grayscale announced the start of recruitment for positions including: Tax Director, ETF Product Senior Manager, Digital Asset Trader, Investment Portfolio Manager, Product Manager, and Engineering Supervisor.

Although the specific impact of these measures on the price of the currency has not yet fully manifested, Grayscale will further promote the mainstream market of cryptocurrency assets by providing investors with more diversified and professional investment products.