BNB leads Grayscale Smart Contract Fund with 30.6%

Grayscale Investments has added BNB token to their Smart Contract Fund, putting it above Ether as well as Solana. 

In its report dated Aug. 5, the U.S. asset management firm assigned BNB 30,6%, while Ether was given 29,47%, and Solana 29.15%. release.

BNB became the biggest component of BNB immediately following its addition. Rebalancing followed CoinDesk Smart Contract Platform Select Capped Index method. Grayscale has not described the move in a way that implies a forecast by Grayscale that BNB is going to outperform Ether, or Solana.

BNB has become the fund’s biggest holding

Grayscale used proceeds from the sale of existing fund components to purchase the BNB token. Cardano was allocated 4.88% of the total, Hedera 2.08%, Avalanche 1.92%, and Sui 1.9%.

This was a large change compared to the review of the first quarter. Ether, Solana and Cardano were the top five holdings of the fund as at May 1. Avalanche was seventh, Hedera eighth, Avalanche ninth, Sui tenth, Avalanche eleventh, Avalanche twentieth, Avalanche nineteenth, Avalanche eighth, Sui eleventh. BNB wasn’t included in that basket. Ether and Solana were able to maintain their weights after its inclusion, while the smaller holdings saw a sharp reduction.

Previously reported by earlier fund rebalance coverageEther and Solana were the top two holdings in the Smart Contract Fund at its last review, which was conducted in May. Cardano ranked third in the Smart Contract Fund’s holdings before BNB was added.

The index rules are more important than the direction call

Smart Contract Fund is a weighted index based on market capitalization with an individual cap. Assets must be eligible and meet index provider trading requirements. They also need to fall into the smart contract platform category. Grayscale stated that component weights are updated daily around New York’s 4 pm time.

Determining a target of 30,6% BNB is therefore not possible. The weightings can change between the formal quarterly review and price changes. Investors cannot also invest directly in index.

It is not an exchange-traded fund. Grayscale intends to pursue secondary market quotes for GSC Shares, but approval remains uncertain.

Grayscale warns that there are “no guarantee” Shares will get approval to be traded on the secondary market.

The manager said that the product was not registered with the Investment Company Act of 1939. The investor may face different liquidity and protection conditions than those of registered mutual funds.

Grayscale sales have not affected UNI or NEAR’s position as leaders

Grayscale has also redistributed proceeds from the sale of Uniswap to other components. Uniswap remained at the top of the list at 34.16 %. Ondo was second at 25.44 %. Ethena was third at 12.19 %. Curve ranked fourth at 4.42%.

Uniswap held 35.22% of the basket in the last quarterly report, while Ondo had 19.83%. The weights show a slight reduction in UNI, and a greater share of ONDO. First quarter review added Ethena, after Aerodrome Finance was removed.

The Decentralized AI fund showed a similar pattern. Grayscale bought NEAR with proceeds and then purchased other components in proportion. NEAR still retained its highest weight of 31.35%. Bittensor came next with 29.15% followed by Render (21.59%) and Filecoin (17.91%).

It is important to note that the sale does not mean NEAR has been completely abandoned. Grayscale confirmed in its published allocation that tokens accounted for nearly a quarter of Grayscale’s portfolio following the transaction. Related NEAR ETF filing coverageGrayscale is also working on a U.S. version of the product, which will hold NEAR in place directly. However, this registration remains subject to regulatory approval.

Grayscale now has a U.S.-based product lineup that includes BNB.

Grayscale has also applied for approval of a BNB spot ETF. A June 3 SEC filing The proposed Nasdaq symbol was GBNB. It was stated that the registration statement was still preliminary and that shares would not be able to be sold until its effective date.

Crypto.news has reported on Grayscale’s BNB ETF updateThe filing was amended to list BitGo, as custodian. BNY Mellon is listed as both administrator and transfer agent. This document didn’t mention any management fees or confirm that staking will be implemented.

Smart Contract Fund Allocation and ETF proposal are separate products. The inclusion of BNB in the Multi Asset Fund does not equate to SEC approval on the separate GBNB Registration.

Next, investors need to watch out for

Grayscale continues to adjust the DeFi funds and Smart Contract Funds under their respective methodology. Although the weights may have changed before this review, daily movements in the markets could affect them. Grayscale stated that all allocations and components are subject to change.

Investors must also consider fund costs. Grayscale stated that the DeFi funds and Smart Contracts do not produce income, and distribute periodic crypto components in order to cover costs. The amount of assets represented by each fund share decreases with time.

BNB is now the largest weight in BNB’s portfolio, but this does not necessarily mean higher returns. Future adjustments depend on index eligibility, asset prices, custody conditions and schedule reviews. Grayscale didn’t publish any verified data on market reactions with its announcement. Therefore, the change in portfolio alone can not tell us how traders reacted to the news.