Grayscale fund enters in ‘smart contracts’ crypto market

The Grayscale Fund is one of the largest Bitcoin holders in the world:

• The fund has been accumulating Bitcoins since 2013 and was the first institution to start investing in the cryptocurrency market

• According to estimates, Grayscale controls almost 4% of the total Bitcoin supply;

• The fund manages almost 1 million Bitcoins (total current supply is around 21 million).

Grayscale announced yesterday that it is providing exposure to the smart contract industry through its newly formed GSCPxE. The fund will thus provide exposure to Cardano, Polkadot, Stellar, Polygon, Algorand, Solana and Polygon. The fund has clearly expanded its offering, previously exposure to the growing smart contracts market could be gained by investing in Ethereum-owned blockchain. 

The largest part of the fund (over 24%) will be Cardano and Solana which means that Grayscale clearly favours these two platforms over the others, although Cardano only made smart contracts available in autumn 2021. The choice was no accident, Grayscale used the Coindesk Smart Contract Platform Select Ex ETH index, which measures the performance of individual cryptocurrencies. 

Grayscale CEO Michael Sonnenshein is positive about the future of digital finance evolution. He also conveyed that he believes investors are seeking" diversified exposure" to the crypto market. Meaning that potentially more and more Grayscale clients expect exposure to no longer just Bitcoin or Ethereum itself but also to other high-tech 'altcoins'.

"Smart contract technology is key to the development of the digital economy, but it is still too early to know which platform will win," - Sonnenshein also conveyed in a statement. In the near future, we can expect fierce competition in the cryptocurrency market related to the smart contract market. 

Smart contracts are able to eliminate the 'human factor' in financial transactions and the various types of errors or delays that, until now, often occur during financial operations. The technology also offers automation of transactions, simplification of their operation and effective settlement without the need for laborious filling of documents. 

The technology ensures synchronisation of workflows between different parties and organisations eliminating inefficient processes including manual filing, delays or even data loss. As a result, the technology can speed up service delivery in healthcare, among others. With blockchain technology, transaction risk is reduced to almost zero, and smart contracts have already been declared by the world's largest banks like Wells Fargo and JP Morgan.

Grayscale still offers investments in Bitcoin and Ethereum but is clearly entering more parts of the market including the anonymous cryptocurrency sector by making investments in Zcash or 'metaverse' gaming platforms available through Decentraland's blockchain exposure.

Estimated value of smart contract flows expressed in USD, in the healthcare market with an estimated average growth rate of 48.2%. Source: MRFR Analysis