Grayscale Investments is the latest major crypto player to abandon its association with the Ripple token.
Grayscale Investments, the world’s largest cryptomaniac fund manager, announced on Tuesday that it has liquidated its holdings in XRP and used the remaining funds to buy more Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC).
The decision affects Grayscale’s Digital Large Cap Fund, an asset weighted by market value that offers exposure to the largest cryptomocities by market capitalization. The sale of XRP occurred on Monday, less than a week after Genesis Global Trading, the fund’s authorized participant, announced that it would soon temporarily suspend XRP trading, probably in relation to the lawsuit filed by the U.S. Securities and Exchange Commission against Ripple.
Genesis Global Trading plans to stop all XRP transactions on January 15.
Before the sale on Monday, the XRP accounted for about 1.46% of the Digital Large Cap Fund. The fund components are now 81.63% BTC, 15.86% Ether (ETH), 1.08% BCH and 1.43% LTC. Each share represented 0.00047489 BTC, 0.00287011 ETH, 0.00047537 BCH and 0.00167314 LTC.
Grayscale also confirmed the new fund composition in a series of Twitter posts on Tuesday.
3 / The $XRP was removed after the quarterly review of the DLC Fund (12/31/20). No other assets qualified for inclusion. The table below highlights the DLC Fund weights on January 4, 2021: $BTC $ETH $BCH $LTC pic.twitter.com/g3QQEf0kd
The fund manager said the XRP was “removed after the quarterly review of the DLC Fund (12/31/20). He explained that no other assets qualified for inclusion in the fund.
Assets under Grayscale management recently surpassed US$20 billion for the first time, highlighting the broad institutional demand for Bitcoin and other digital assets. The asset manager is collecting Bitcoin Formula in large quantities, with at least one metric showing that Grayscale purchased almost three times more BTC than was extracted in December.
Although XRP was among several high capitalization cryptomaps to recover in recent months, its outlook remains clouded by a wave of exchanges slips in the United States. Bitwise Asset Management became one of the first high profile fund managers to download its XRP holdings before Christmas.
In turn, Ripple pledged to fight the SEC’s accusations that the company made an illegal securities offering of its XRP token. A statement issued last week by Ripple said the company would continue to operate and support its products outside the United States.