It has been approximately five months since my last Seeking Alpha article covering the Grayscale Digital Large Cap Fund (OTCQX:GDLC). This fund, which I've analyzed multiple times since 2022, has a significant BTC-heavy allocation.
Current Holdings & Discount Rate
As of now, the fund has a 10% NAV discount and a large portion of its capital allocated to Bitcoin, as shown below:
| Asset Allocation | Assets/Share | Weight | |------------------|--------------|--------| | Bitcoin (BTC-USD) | 0.00036456 | 80.60% | | Ethereum (ETH-USD) | 0.00221657 | 9.37% | | XRP (XRP-USD) | 1.06819845 | 5.61% | | Solana (SOL-USD) | 0.00939617 | 3.33% | | Cardano (ADA-USD) | 0.66104994 | 1.09% |
Source: Grayscale, as of 4/23/25
This allocation to Bitcoin has contributed to the fund's NAV rate discount compression since the crypto winter of 2022. Currently, GDLC holds approximately $670 million in assets under management with 15.87 million shares outstanding.
Bitcoin Allocation & Altcoin Exposure
Historically, GDLC has maintained a high allocation to Bitcoin, reaching 80.60% in April 2025, the largest since I began covering this fund. This increase is noteworthy amidst the performance of other cryptocurrencies. In the past, the fund's allocation to Bitcoin fluctuated, but it has remained heavily weighted towards BTC, potentially limiting the fund's ability to capitalize on an altcoin rally.
The current 10% exposure to alternative coins is significant, particularly with the potential approval of spot ETFs for XRP and SOL. Should these approvals occur, GDLC could see a re-rating in its valuation.
In a market increasingly dominated by Bitcoin, GDLC faces challenges. The fund's 20% combined allocation to ETH and other alts may not be the best way to play a potential reversal in BTC dominance. If Bitcoin starts losing market share to altcoins, GDLC's returns may lag behind more direct exposure to those assets.
Closing Thoughts
While GDLC may serve as a decent option for passive investors looking for exposure in the crypto market, its high allocation to Bitcoin may not appeal to those specifically seeking altcoin investments. With various spot ETFs already available, investors may find better opportunities by piecing together individual altcoin portfolios. Therefore, I recommend GDLC as a 'hold' and suggest that altcoin buyers explore other options for potentially higher returns.
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