Our research team has been busy this summer, analyzing the evolving #Ethereum landscape. Below, we highlight the key reports and insights from Grayscale Research. 🧵👇 1/ Explore the vast potential of #Ethereum. Our latest report dives deep into the diverse ecosystem, from DeFi projects like $AAVE and $UNI to L2 solutions like $MATIC.

Read the full report: grayscale.com/research/repor…

$GBTC Record Date Update: NAV & Price Explained

As of July 30, 2024, 10% of Grayscale Bitcoin Trust’s (“GBTC Trust”) underlying Bitcoin is being spun-off in connection with the creation of Grayscale Bitcoin Mini Trust (“BTC Trust”). As a result, the NAV of GBTC Trust shares will be 10% lower than the previous day’s NAV on July 29, 2024 (not accounting for any potential increase or decrease in the price of Bitcoin).

As we've built our product family, we've only ever incorporated passive strategies. This week, that changes.
Meet Grayscale Dynamic Income Fund (GDIF), our first actively managed investment product, focused on multi-asset staking. Here’s how it works: (1/5) GDIF seeks to optimize income in the form of staking rewards associated with proof-of-stake digital assets, with capital appreciation from such investments as a secondary goal. (2/5)

Because networks depend on connections between users, they often feature a nonlinear relationship between adoption and value. The # of possible connections between users rises much faster than the # of users.

A 🧵on how this applies to crypto. (1/6) Network effects predict a nonlinear relationship between user adoption and network value. This is why assets tied to a network’s economic value may produce outsized returns during certain phases of network growth. (2/6)

🧵 Today we announced the latest quarterly update to the component weightings for our multi-asset crypto index funds:

Grayscale Digital Large Cap Fund $GDLC
Grayscale DeFi Fund $DEFG
Grayscale Smart Contract Platform Ex-Ethereum Fund #GSCPXE

Read on for details: 2/ As we’ve explained in the past, these products are designed to track @CoinDesk industry sector indices, and components are determined according to the methodology of each index. gryscl.co/3WPzaf7

[NEW TODAY] Due to recent events, investors are understandably inquiring deeper into their crypto investments. In this thread we’ve compiled additional information about the safety and security of the assets held by our digital asset products. gryscl.co/3EHaS0m 🧵 2) Each of Grayscale’s digital asset products is set up as a separate legal entity: an investment trust for single asset products, and limited liability company for diversified products.

In the wake of recent events, our investors should know that the safety and security of the holdings underlying Grayscale digital asset products are unaffected. 🧵 Today Genesis Global Capital, a subsidiary of Grayscale’s affiliate, Genesis Global Trading, announced that it is temporarily suspending redemptions and new loan originations. Genesis Global Capital is not a counterparty or service provider for any Grayscale product. As a result:

We’ve filed the opening brief in our lawsuit against the SEC, challenging their decision to deny our application to convert $GBTC to a spot Bitcoin ETF.

A “brief” thread: 2/ The SEC’s decision back in June was disappointing, but we were prepared for all possible outcomes. That same night, we took action. We’ve now reached the next milestone in the legal process.

In 2016, #Ethereum forked into $ETH and $ETC, today the 2nd and 19th largest cryptocurrencies by market cap, respectively.

The potential merge to Proof of Stake could prompt another fork.

A 🧵 on why this time is different, and why DeFi on the new chain could be catastrophic: 2. First, it’s important to note that the motivations are different. The 2016 Ethereum fork was prompted by a crisis, while the upcoming Proof of Stake (PoS) migration is prompted by an ambitious, proactive technological update.

Let’s look a little deeper.

Today, the SEC denied our application to convert $GBTC to a spot #Bitcoin ETF. 🧵 We fervently disagree with the SEC’s decision.

We are disappointed.

We are prepared.

We have spent months preparing for all scenarios. No realistic outcome would have been a surprise.

As we enter the final month before a response is due on our application to convert $GBTC to an ETF, we have retained Donald B. Verrilli, Jr., former Solicitor General of the United States, as additional legal counsel. A short 🧵 on why: 🧵 We want to ensure that we have the strongest possible team of legal minds ready to support our $BTC ETF application. Verrilli will serve as a senior legal strategist, working alongside our attorneys at @DavisPolkReg and in-house counsel.

If $GBTC is approved to convert to a Spot Bitcoin ETF:

We will reduce our management fee
Mechanisms inherent to an ETF should effectively close the discount to NAV
U.S. investors will get a new option to access the spot price of #Bitcoin

A 🧵 on how you can support our efforts: “American investors should have a choice in how to obtain #Bitcoin exposure,” said Grayscale CEO Michael @Sonnenshein. “We will use the strength of Grayscale’s brand and resources to continue to advocate for these investors.” gryscl.co/35hb474 (2/5) $GBTC

Today, we announced the quarterly rebalancing of funds for both Grayscale Digital Large Cap Fund and Grayscale #DeFi Fund. What does this mean? Read this thread for more. 👇 (1/4) At the end of the day today, Grayscale Digital Large Cap Fund’s fund components were a basket of the following assets and weightings: $BTC, 62.19% // $ETH, 26.08% // $ADA, 5.11% // $SOL, 3.24% // $UNI, 1.06% // $LINK, 0.82% // $LTC, 0.77% // $BCH, 0.73%. (2/4)

We just announced the updated fund component weightings for Grayscale Digital Large Cap Fund, which now includes #Solana ($SOL) and #Uniswap ($UNI). This is the first time SOL will be included in a Grayscale investment vehicle. Read this thread for more. (1/5) In accordance with its construction criteria, we adjusted Grayscale Digital Large Cap Fund’s portfolio by selling certain amounts of the existing components in proportion to their respective weightings and used the cash proceeds to purchase Solana and Uniswap. (2/5)