According to Grayscale, the money received from the sale of the tokens was utilised to purchase already-existing portfolio items. Year-to-date, ATOM and ADA are both declining.
The tokens for Cardano and Cosmos have been removed by Grayscale from their respective funds, the Grayscale Digital Large Cap Fund (GDLC) and the Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE).
As part of its quarterly fund rebalancing, Grayscale, the largest asset manager focused on cryptocurrencies globally, announced the removal of the tokens in an April 4 X post.
The fund’s current components were purchased with the money raised from the token sale.
After the ADA token was eliminated, 70.96% of Grayscale’s large-cap fund is now made up of Bitcoin, Ether, Solana, XRP, and Avalanche.
After subtracting ATOM, Grayscale’s smart contract platform fund now contains 58.41% Solana, 14.56% Cardano, 12.25% Avalanche, 8.53% Polkadot, and Polygon tokens.
Globally, Grayscale is the biggest asset management with a concentration on cryptocurrency. It revealed its crypto investment fund at the end of March, giving cryptocurrencies with staking returns priority.
Only clients with a net worth of more than $2.2 million or more than $1.1 million in assets under management are eligible to invest in the new Grayscale Dynamic Income Fund.
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While ATOM lost more than 3.3% year-to-date (YTD), Cardano’s ADA token fell 8.1%, substantially underperforming both Ether and Bitcoin, the first cryptocurrency in history.
Comparatively, according to TradingView data, Ether has increased by more than 40% while Bitcoin has increased by 59% since the year’s beginning.
After plunging below the crucial $0.6 barrier on April 2, ADA is down more than 10% on the weekly chart. It is currently 81% behind its previous all-time high of $3.10, which was attained in September 2021.
Additionally, ATOM has dropped more than 10% in the last week and is currently trading at $10.8, 75% below its record $44.7 set in September 2021.
As of the present moment, both ADA (Cardano) and ATOM (Cosmos) have yielded negative returns for investors.
This downturn in performance may be attributed to various factors affecting the cryptocurrency market as a whole.
Cardano, often hailed for its ambitious goals in creating a scalable and interoperable blockchain platform, has faced challenges in realizing its full potential amidst a competitive landscape dominated by established players like Ethereum.
Despite its promising technology and dedicated community, Cardano has struggled to maintain positive price momentum in recent times.
Similarly, Cosmos, with its focus on facilitating interoperability between different blockchains, has encountered obstacles that have hindered its price growth.
Despite being a part of the broader trend towards cross-chain interoperability, Cosmos has faced stiff competition from other projects vying for dominance in this space.
Additionally, market volatility and uncertainty surrounding regulatory developments have contributed to the negative performance of both ADA and ATOM, as investors remain cautious amidst shifting market dynamics.
Investing in cryptocurrencies requires both courage and caution, as every dip holds the potential for growth.
While the current negative returns may be disheartening for investors, it’s important to remember that the cryptocurrency market is highly volatile and subject to rapid fluctuations.
Factors such as technological advancements, regulatory clarity, and shifts in investor sentiment can all influence the trajectory of individual cryptocurrencies.
As such, investors should conduct thorough research and exercise caution when navigating the cryptocurrency market, keeping in mind the potential risks and rewards associated with each investment.
Despite the current downturn, both ADA and ATOM continue to represent innovative projects with strong fundamentals, and their long-term success may ultimately hinge on their ability to overcome short-term challenges and deliver value to users and investors alike.
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