Cardano Price Tumbles As Grayscale Sells All ADA From Large Cap Fund
April 05 2024 - 8:00AM
NEWSBTC
The Cardano (ADA) price is experiencing a notable decrease,
dropping by 12% since the start of the week, with a 2.6% dip
recorded today alone. Despite this, with a market capitalization of
$20.27 billion, ADA maintains its position as the 9th largest
cryptocurrency. This recent downturn comes amidst a broader crypto
market experiencing mostly sideways to downward movement, with ADA
recording more significant losses compared to its peers like ETH,
which is down by 7.4%, BNB by 6.4%, Solana by 6.3%, and XRP by
6.1%. Grayscale Dumps Cardano From GDLC A pivotal factor behind
Cardano’s sharper decline could be linked to the recent liquidation
of all ADA holdings by the Grayscale Digital Large Cap Fund (GDLC).
The fund, which currently boasts assets under management (AUM)
worth $579 million, had Cardano constituting 1.62% of its portfolio
on January 4, which amounts to approximately $9.4 million. Related
Reading: Cardano Rides The ETF Wave: Inflows Surge To Over $1
Million – Details On Thursday, Grayscale Investments announced the
decision as part of its first quarter 2024 review. According to the
official press release, the adjustment to GDLC’s portfolio entailed
the selling of Cardano and reallocating the cash proceeds to
existing Fund Components, proportional to their weightings. This
rebalancing led to the removal of ADA from GDLC’s portfolio. The
final composition of the fund as of April 3, 2024, includes Bitcoin
(70.96%), Ethereum (21.84%), Solana (4.52%), XRP (1.73%) and
Avalanche (0.95%). The press release detailed, “In accordance with
the CoinDesk Large Cap Select Index methodology, Grayscale has
adjusted GDLC’s portfolio by selling Cardano (ADA), and using the
cash proceeds to purchase existing Fund Components in proportion to
their respective weightings. As a result of the rebalancing,
Cardano (ADA) has been removed from GDLC.” Related Reading: Panel
Of Experts Reveal When The Cardano Price Will Reach $3 Grayscale
also highlighted the quarterly evaluations of the GDLC, DEFG, and
GSCPxE Fund compositions, aimed at updating existing Fund
Components or including new ones based on index methodologies
provided by the Index Provider. This practice ensures that the
funds’ holdings reflect the most current market trends and asset
performance. Notably, the Grayscale Smart Contract Platform
Ex-Ethereum Fund still contains Cardano. The cryptocurrency is the
second-largest position after Solana (58.41%), with a weighting of
14.56%. In response to these developments, Charles Hoskinson, the
founder of Cardano, offered a terse commentary via X, stating,
“Wall Street give; Wall Street take.” This succinct remark
encapsulates the volatile nature of crypto investments and the
significant impact that major financial players like Grayscale can
have on the market dynamics of digital assets. Wall Street give;
Wall Street take https://t.co/dkyrhHW4WS — Charles Hoskinson
(@IOHK_Charles) April 5, 2024 At press time, ADA was trading at
$0.57. In the short term, the 100-day EMA at $0.58 is the key
resistance that ADA needs to overcome in order to develop new
bullish momentum. The 100-day EMA has served as strong support
three times since mid-January. After the recent dip below this
indicator, ADA is struggling to reclaim it. In the medium term, the
bulls need to break above the $0.68 level. Featured image from
Guarda Wallet, chart from TradingView.com
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