Revisiting the "Grayscale Effect" of the last bull market: 14 tokens have a return rate of over 200%, and the market cycle has a significant impact

Author: Nancy, PANews

In recent times, as the prices of currencies such as SUI and ZEN have soared, the "grayscale effect" has reappeared, and grayscale positions have become one of the market investment indicators. So, how do Grayscale’s carefully selected crypto tokens perform in terms of ROI? This article, PANews, reviews the market performance of the 14 tokens involved in the crypto trust fund launched by Grayscale during the last bull market cycle. The time period is from March 2021 to March 2022.

The average rate of return exceeds 200%, and **the market cycle has a

significant impact**

During the last bull market, Grayscale launched and opened 14 cryptocurrency trust products through the OTC market, DeFi fund DEFG and GSCPxE fund. These products were opened one after another in about a year. Judging from the product launch time, Grayscale began to launch related token funds in the early stages of the bull market, and began to accelerate the frequency of deployment in the middle and late stages.

From the perspective of return on investment, the average maximum increase of these 14 tokens after the launch of Grayscale was 204.8%. Among them, the growth rates of LPT, LDO and BAT were particularly prominent, reaching 1497.1%, 292.6% and 239.8% respectively. In contrast, SOL, DOT, and SNX have seen much lower than average gains.

From the perspective of the length of time required for investment to generate returns, the average period for 14 tokens to reach new stage highs is 84.4 days. Among them, BAT, MANA and LPT require longer periods, basically exceeding 250 days, but the return rate It is also relatively high; SOL, FIL, AVAX and DOT reached new highs in a short period of time, but their increases were relatively limited. This period is in the market adjustment period after Bitcoin's new high. This phenomenon not only shows that under normal circumstances, the longer the investment time during the bull market, the more advantageous it is to hold the yield, but it is also related to the time of product launch. Previous sector rise cycles show that most public chains are the targets of the first wave of bull market rises. Grayscale Most of these projects launched achieved good growth in the early stage, resulting in limited room for growth in the later stage.

However, this difference is also affected to some extent by changes in market cycles. Specifically, the average increase in token funds launched by Grayscale at the beginning of the bull market in the first half of 2021 was 446.8%; in the middle of the bull market from April to November 2021, the increase dropped to 85.4%; by March 2022, crypto funds During the market correction period, the tokens launched rose by only 40.3%. It can be seen that Grayscale's return on investment is greatly affected by market cycle fluctuations, showing obvious cyclical characteristics.

From this point of view, although Grayscale’s cryptocurrency trust products provided considerable returns during the bull market, their performance was significantly affected by market fluctuations, so investors should fully consider the overall market trend when making investment decisions.

**Participate in the layout of multiple explosive tokens and expand the

scope of investment products**

Recently, the prices of many tokens have performed strongly, and Grayscale’s layout may play an important role in driving market trends.

For example, the price of XRP broke through to a multi-year high some time ago. In September this year, Grayscale announced that it would relaunch the first U.S. XRP trust fund and officially open it to qualified investors in the near future. You know, as early as January 2021, Grayscale removed the XRP trust and liquidated the tokens it held due to Ripple's legal dispute. This change has also been 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 following months, which may indicate the market's positive response to Grayscale's move.

The price of SUI has also been very strong over the past few months. A few months ago, Grayscale updated its investment strategy and announced the Top 20 tokens that are expected to rise significantly by the end of 2024, including the addition of 6 new tokens such as SUI and TAO. At the same time, Grayscale has also opened up the investment layout of SUI. In August this year, it announced that it would launch GrayscaleSuiTrust, which will be officially opened to qualified investors in the near future.

Another token worthy of attention is ZEN. Its price has also seen a gratifying increase recently, with an increase of approximately 215% in the past 30 days. After recently increasing its holdings of ZEN tokens, Grayscale also recently announced that it has submitted Grayscale Horizen Trust (ZEN) Form 8-K to the SEC. Investors can obtain ZEN token exposure in the form of securities.

In addition to the above projects, Grayscale also provides legitimacy and recognition to more crypto assets. On December 24, Grayscale announced that it would open private placement subscriptions for 22 cryptocurrency trust products to qualified investors, including mainstream tokens such as AAVE, AVAX, LINK, SOL, and XRP, as well as fund products in niche fields such as DeFi and AI. , investors can subscribe based on net asset value (NAV). The products opened this time include theme funds such as Grayscale Decentralized AI Fund (decentralized AI fund) and Grayscale Decentralized Finance Fund (DeFi fund), as well as single asset trusts of emerging protocols such as Bittensor, Lido DAO, and Optimism.

In addition, Grayscale is further accelerating its business expansion and seeking more professional talents to cope with increasingly complex market demands. At the beginning of this month, Grayscale announced the launch of recruitment, including: tax director, senior ETF product manager, digital asset trader, portfolio manager, product manager and engineering director.

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