Grayscale Investments just wrapped up its regular quarterly shuffle of crypto funds, announcing on July 7 that it had completed the latest rebalancing for its DeFi Fund, Smart Contract Fund, and Decentralized AI Fund. The changes officially took effect at the end of trading on July 3.
ONDO Joins the DeFi Fund
One of the biggest updates was in the Grayscale DeFi Fund, which added Ondo (ONDO) to its portfolio. To make room, Grayscale trimmed small portions of the fund’s existing assets. ONDO now makes up 18.22% of the DeFi Fund. Despite the new addition, Uniswap (UNI) and Aave (AAVE) remain the fund’s largest holdings, accounting for 34.01% and 30.74% respectively. The rest of the fund is allocated among MakerDAO, Curve, and Lido.
Smart Contract Fund Drops DOT for HBAR
Meanwhile, Grayscale’s Smart Contract Fund, which focuses on major blockchain platforms supporting decentralized apps, saw Polkadot (DOT) removed and replaced with Hedera (HBAR). As with the DeFi Fund, Grayscale sold off parts of other assets to fund the purchase and keep the portfolio balanced.
After the switch, Ethereum (ETH) and Solana (SOL) continue to dominate the Smart Contract Fund, each holding weights just above 30%. Other tokens in the updated mix include Cardano (ADA), Sui (SUI), and Avalanche (AVAX).
Decentralized AI Fund Keeps Same Tokens, Tweaks Allocations
Over in the Decentralized AI Fund, there weren’t any new additions or removals this quarter. Instead, Grayscale adjusted the fund’s allocations to stay aligned with its strategy. Bittensor (TAO) and NEAR Protocol (NEAR) now make up the largest share of the portfolio, followed by Render (RENDER), Filecoin (FIL), and The Graph (GRT).
How Grayscale’s Funds Work
It’s worth noting that none of these crypto funds actually generate income there’s no interest or dividends involved. Instead, they offer investors a way to gain exposure to specific sectors of the crypto market without having to buy and manage individual tokens themselves. Investors essentially track the performance of areas like DeFi, smart contract platforms, or decentralized AI through these funds.
To cover operating costs, Grayscale occasionally sells small amounts of the funds’ assets, which gradually reduces the number of tokens backing each share over time.
Eyes Still on the GDLC ETF
Beyond fund rebalancing, Grayscale continues pushing forward with new investment products, including its highly anticipated Grayscale Digital Large Cap ETF (GDLC). This ETF would include the top five cryptocurrencies by market cap Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA).
However, the path forward hit a snag. Although the GDLC ETF was initially approved, the SEC announced a review of the decision on July 1, pausing the listing indefinitely as regulators examine the approval and work on clearer guidelines for crypto investment products.
Other Updates
Separately, Grayscale has updated its Top 20 list for Q3, adding Avalanche (AVAX) and Morpho (MORPHO), highlighting the company’s ongoing efforts to keep pace with the fast-changing crypto market.
