Let institutions "carry the sedan chair" for your counterfeit bags: The grayscale funds and Coin50 index that must be focused on in this bull market

Author: A Ray's New World, BlockBeats

At a time when almost everyone was FUDing about the absence of an altcoin season, the market finally emerged from nearly half a year of "garbage time," and the altcoin season has indeed arrived as expected. According to data statistics, among the 388 tradable crypto assets on Binance, nearly 299 have increased by over 50% in the past 30 days, 98 have increased by over 100%, and only 10 assets have shown no increase at all.

However, in the universal rise mode during the "money-picking time," how to select the top-performing tokens to maximize the use of funds has become a science. Which altcoins should you buy to outperform the market average? Instead of following KOLs to buy, it’s better to let Grayscale and Coinbase do the "work" for you.

Leading the Market: Grayscale Funds

In the last bull market, Grayscale concepts were everywhere. In this bull market, the Grayscale concept continues to dominate the crypto space.

Mainstream Coin Funds

Grayscale has launched a series of funds around the top 20 cryptocurrencies by market capitalization, such as BTC, ETH, SOL, XRP, AVAX, SUI, BCH, LINK, XLM, LTC, etc. Some leading tokens in their respective sectors have also made the cut, such as STX, BAT, ZEC, MKR, and ZEN.

In addition to single-asset trust funds, Grayscale's bundled cryptocurrency combination funds still hold significant reference value.

Grayscale Decentralized AI Fund

This bundle of decentralized AI funds includes AI assets like Near, Filecoin, Bittensor, Render, and Graph. These assets have performed well this month, with NAV per share soaring from $6 to $14. The current assets under management amount to $2.2 million.

Left: Decentralized AI Fund Holdings; Right: NAV per Share

It is worth noting that Near, FIL, Bittensor, and the same sector's Livepeer all have independent Grayscale funds.

Grayscale DeFi Fund

Grayscale's Decentralized Finance (DeFi) Fund is one of the first to invest in a basket of decentralized finance applications in the form of securities and derive value from them, including assets like UNI, AAVE, LDO, MKR, and SNX. It has performed well in the past month, with NAV per share rising from $13 to $35. The current assets under management are $8 million.

Left: Decentralized AI Fund Holdings; Right: NAV per Share

It is noteworthy that Grayscale also has an independent AAVE fund.

In addition to the above funds, Grayscale is expected to add new fund tokens across various sectors:

The DeFi sector includes a total of 7 tokens: Jupiter (JUP), Ondo Finance (ONDO), Ethena (ENA), Core (CORE), THORChain (RUNE), Aerodrome (AERO), Pendle (PENDLE);

The underlying infrastructure sector includes a total of 6 tokens: Celestia (TIA), Pyth Network (PYTH), Cosmos (ATOM), Akash (AKT), UMA Project (UMA), Neon (NEON);

The Layer 1 sector includes a total of 9 tokens: Toncoin (TON), TRON (TRX), Aptos (APT), Injective Protocol (INJ), Internet Computer (ICP), Kaspa (KAS), VeChain (VET), Mantra (OM), Celo (CELO);

The Layer 2 sector includes a total of 8 tokens: Optimism (OP), Arbitrum (ARB), Sei (SEI), Starknet (STRK), Polygon (POL, formerly MATIC), Mantle (MNT), Immutable (IMX), Metis (METIS);

The DePIN sector includes a total of 2 tokens: Arweave (AR), Helium (HNT);

The AI+ sector includes a total of 2 tokens: Fetch.ai (FET), Worldcoin (WLD);

The Meme sector includes a total of 1 token: Dogecoin (DOGE).

Among the Grayscale concept tokens listed above, almost all have outperformed the average gains of the bull market. In addition to the must-have Grayscale Select, the Coin50 Index established by Coinbase is also a good reference standard.

Coin50: The Nasdaq of Crypto

What is the Coin50 Index?

As the saying goes, "First-class companies set standards, second-class companies set brands, and third-class companies make products." In line with the S&P and Nasdaq, Coinbase has created the COIN50 by weighting the top 50 quality cryptocurrencies by market capitalization, establishing the world's leading digital asset benchmark index. COIN50 aims to provide investors with a transparent and reliable tool to better understand and evaluate the performance of the cryptocurrency market.

How has Coin50 performed?

In terms of weight composition, BTC, ETH, and SOL remain the most important assets in crypto, with BTC accounting for 50%, ETH for 28.8%, and SOL for 6.4%.

Among the top five are XRP and DOGE, accounting for 2.9% and 1.4%, respectively, while the remaining crypto assets account for 10.4% of the weight.

The COIN50 Index has achieved a return rate of 68.30% over the past 30 days, while the return rate over 90 days has been 99.64%. Even with BTC and ETH accounting for 70% of the weight, such astonishing returns can still be realized. This shows how exaggerated the return rates of other crypto assets within this index are, excluding large-cap coins like BTC and ETH.

It is worth noting that the COIN50 Index is not static; it will be evaluated quarterly based on the fundamentals of the tokens for additions and deletions. Recently, tokens AXS, BLUR, JASMY, KSM, and EGLD have been included in the COIN50 Index.

Where are the Opportunities?

By summarizing the crypto assets in the COIN50 and Grayscale trust funds, we can identify some highly overlapping assets. In addition to BTC, ETH, and SOL, tokens like XRP, XLM, SUI, AVAX, AAVE, LINK, and LPT have all experienced "exponential" growth in the past 60 days. Moreover, the main funding sources for these tokens have come from U.S. institutions, which can accommodate large capital.

At the same time, many people believe this is just hindsight. "What you mentioned has already surged; where are the opportunities?"

However, a bull market allows those who are well-prepared to make big profits, those who are somewhat prepared to make profits, and those who are unprepared to experience profit-making.

After understanding the power of Coin50 and Grayscale holdings, there are still many "wealth codes" around this main line that can help "somewhat prepared" individuals make money.

For example:

(1) You can explore projects that are due for a rebound. Not all tokens in the above list surged at the same time; there has been a certain "sector rotation." After SOL and SUI cooled off, it was XRP and XLM, and after XRP and XLM took a break, it was blue-chip DeFi, followed by hot sector projects like LPT. You can position yourself for projects that are set to rebound, such as APE, BLUR, ZEC, etc.

(2) In traditional financial markets, we can analyze using U.S. stocks as an example. In 1993, the first ETF, the SPDR S&P 500 ETF, was listed on the New York Stock Exchange. From 2000 to 2009, the U.S. ETF market rapidly expanded, forming a diversified asset class that includes broad-based, industry-themed, Smart Beta, fixed income, and commodity ETFs. The crypto market is still in its early stages compared to the already mature traditional financial market.

Currently, ETFs for BTC, ETH, SOL, etc., have been approved, and there is a high probability that the XRP ETF will be approved as well. Once these leading ETFs are completed, there will definitely be a series of ETFs based on various sub-sectors in the future, such as DeFi ETFs, AI ETFs, Meme ETFs, etc.

The compound annual growth rate of U.S. ETFs from 2010 to 2021 was 19.7%, and it is foreseeable that there will still be many growth opportunities for crypto asset ETFs in the future.