Crypto Market Sell-off Sees Grayscale’s Digital Asset Trust Lose Nearly $400 Million

Grayscale, a “trusted authority” on investments that focuses on providing “secure access” and “diversified exposure” to crypto assets, has seen the value of the cryptos under its management drop nearly $400 million over of the recent cryptocurrency market sell-off that saw bitcoin drop below $5,000 for the first time since October 2017.

According to a recent portfolio update shared on social media, the Digital Currency Group (DCG) subsidiary revealed the net value of its Bitcoin Investment Trust dropped from $1.276 billion to $893 million after the sell-off.

Similarly, the firm’s other products have seen their net value plummet. Grayscale’s Bitcoin Cash Investment Trust, since the beginning of the month, dropped from $6.5 million to $3.6 million, while its Ethereum Investment Trust dropped from $8.8 million to $5.8 million.

One of the most notable declines is that of the Ethereum Classic Investment Trust, which went from $42.5 million to $26.1 million, a nearly 40% drop in little over 20 days. Despite the drop, the firm has been securing additional capital throughout the bear market.

As CryptoGlobe covered, Grayscale’s Q3 digital asset investment report revealed it raised $329.5 million so far this year in order to develop its products, with the majority of the funds coming from institutional clients.

Its quarterly report showed that institutional interest in cryptoassets is strong and growing. The firm’s report noted that in Q3 – from July to September – it raised about $81 million, with 70% of those funds coming from institutional investors.

The firm launches its crypto investment funds for investors, and manages them for a fee. These allow investors to invest in their underlying cryptocurrency markets, without having to worry about owning or securing their own cryptocurrencies.

One of the last investment funds Grayscale launched was based on Horizen – formerly known as ZenCash (ZEN) – a privacy-centric cryptocurrency that, just like Zcash (ZEC) uses “zero knowledge proofs” that let users reveal a transaction has occurred, without adding any additional information.

Grayscale’s ZEN Investment Trust currently has $2.7 million worth of net assets, down from $5.1 million at the beginning of this month.

Tether Gold (XAU₮): A New Tokenized Gold Product Built on Ethereum and TRON

Siamak Masnavi

On Thursday (January 23), Tether launched a new product called Tether Gold (XAUt), which is a crypto token -- available as an ERC-20 token on the Ethereum blockchain and as a TRC20 token on the TRON blockchain -- representing "ownership of one troy fine ounce of physical gold on a specific gold bar" held in a Swiss vault. 

Paolo Ardoino, CTO at Tether, had this to say:

There is growing demand for digital exposure to physical gold, making the launch of Tether Gold a timely innovation in the crypto ecosystem. Tether Gold provides the combined benefits of both physical and digital assets, removing the drawbacks of holding gold in more traditional ways, such as high storage costs and restricted access.

The XAUt token "can be transferred to any on-chain address from the purchasers' Tether wallet where it is issued after purchase." A particular gold bar(s) "will be associated with each on-chain address where Tether Gold is held."

The allocated gold is "identifiable with a unique serial number, purity and weight" and XAUt token holders are able to verify "the details of the gold bars associated with their address" via the Tether Gold product page on the Tether website. 

Tether Good Lookup.png

Tether Gold is a cryptoasset issued/sold by TG Commodities Limited (a UK company incorporated in December 1998). Each XAUt token represents "one troy fine ounce of gold on a London Good Delivery gold bar" and may be "fractionalized up to six decimal places (i.e. in increments as small as 0.000001 troy fine ounce)." 

Here are a few more important things you should know about Tether Gold:

  • You need a verified account with TG Commodities Limited if you want to buy XAUt directly from its issuer. The minimum purchase amount is 50 XAUt (worth approximately $78,250 as of 23 January 2020). The purchase price must be paid in USD.
  • XAUt tokens can be traded on supported exchanges (such as Bitfinex) "in fractions as small as the exchanges permit.", but you do need to pay 
  • There are no custody fees, but you do need to pay "a one-time 25 basis point fee at the time you purchase an XAUt from TG Commodities Limited and certain additional fees on redemption." 
  • To redeem Tether Gold tokens, you need a verified account with TG Commodities Limited. You must have at least "one full bar of gold worth of tokens" in order to use the redemption service. The physical gold can be delivered to either somewhere in Switzerland or the XAUt token holder can ask TG Commodities Limited to sell their physical gold and receive USD from the proceeds of the sale. 

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