Grayscale Investments, the world’s largest crypto asset manager, has updated its fund compositions after the second quarter of 2024, leading to significant changes in its investment strategy. The adjustments were announced on Grayscale’s official X (formerly Twitter) page and detailed in a CSIMarket report.
Grayscale’s adjustments reflect a strategic realignment to meet the diversifying demands of investors. Notably, the weights of assets in the GDLC fund remain unchanged with Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Avalanche (AVAX) maintaining their respective weights of 70.46%, 23.51%, 3.86%, 1.54%, and 0.63%.
Significant Changes in GSCPxE Fund
In contrast, the GSCPxE, which follows the Coindesk Smart Contract Platform Select ex ETH Index, saw notable changes. The fund has exited its position in Polygon (MATIC), reallocating the proceeds to other existing components of the fund by their set weights.
Impact on MATIC’s Market Position
The decision to remove MATIC from the GSCPxE Fund has had immediate market repercussions. Despite a general uptick in MATIC’s price by 8.5% over the last 24 hours, pushing its market cap to $4 billion, trading volumes have dipped significantly by 39.74% to $292 million. This drop in volume accompanies a broader weekly price decline for MATIC.
AMBCrypto’s analysis suggests a strong bearish trend for MATIC. High levels of liquidations in long positions in the past week indicate a misalignment with investors’ expectations, leading to forced closures of these positions. The Directional Movement Index (DMI) further underscores this sentiment, with a negative index significantly outweighing the positive, suggesting dominant selling pressure.
Future Outlook for MATIC
The short-term outlook for MATIC remains bearish until it can surpass its 200-day moving average. If current gains sustain, there might be a potential reversal, aiming for the next resistance level around $0.5. However, continued bearish trends could see prices falling to as low as $0.42.
The rebalancing by Grayscale highlights the dynamic nature of crypto markets and the need for funds to adapt swiftly to underlying market movements and investor sentiment.
