Grayscale announces fund aimed at optimizing staking rewards

A source close to Grayscale told Blockworks that the fund was seeded with Grayscale capital on Oct. 2, 2023

March 5, 2024 05:42 pm

Grayscale CEO Michael Sonnenshein | Coinbase/"Invest:NYC 2019 Michael Sonnenshein Managing Director Grayscale Investments" (CC license)

Grayscale announced the launch of a new fund Tuesday.

Grayscale Dynamic Income Fund (GDIF) aims to stake certain cryptos and distribute the earnings back to investors on a quarterly basis through USD. The fund is also Grayscale’s “first actively-managed crypto fund.”

“As our first actively managed Fund, GDIF is an important expansion of our product suite and enables investors to participate in multi-asset staking through the convenience and familiarity of a singular investment vehicle,” CEO Michael Sonnenshein said in a statement.

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The fund was seeded with internal capital from Grayscale in October of last year, a source close to Grayscale told Blockworks. So far, the fund has recorded gross returns of 142%, and net fee returns of 127%, the source continued.

“Qualified clients” are able to invest in GDIF, meaning it’s not open to the general public.

“A qualified client is a person that meets certain thresholds set by the [Securities and Exchange Commission] which for individuals are currently a net worth of at least $2.2 million, not including the value of their primary residence or assets under management of $1,100,000,” the press release announcing the fund clarified.

The staked crypto includes Aptos (APT), Celestia (TIA), Coinbase Staked Ethereum (CBETH), Cosmos (ATOM), Near (NEAR), Osmosis (OSMO), Polkadot (DOT), Sei (SEI) and Solana (SOL).

Grayscale, in January, converted its bitcoin trust to a bitcoin ETF following a legal battle with the SEC. Bitcoin (BTC) locked in a new all-time high the same day Grayscale announced GDIF, and the spot bitcoin ETFs topped $9.5 billion in volume, surpassing the previous record of $7.6 billion.

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