Grayscale Investments®, a leading asset management firm specializing in digital assets, has announced the quarterly rebalancing of its multi-asset investment funds following its fourth-quarter 2024 review. This strategic update reflects evolving market dynamics and aims to ensure each fund remains aligned with its underlying index or methodology, offering investors timely exposure to high-potential crypto sectors such as decentralized AI, DeFi, large-cap digital assets, and smart contract platforms.
The rebalancing took effect at the close of January 6, 2025, and includes changes across four key funds: the Grayscale® Decentralized AI Fund (AI Fund), Grayscale® Decentralized Finance Fund (DEFG), Grayscale® Digital Large Cap Fund (GDLC), and Grayscale® Smart Contract Platform Ex-Ethereum Fund (GSCPxE Fund). These adjustments underscore Grayscale’s commitment to maintaining diversified, rules-based portfolios that respond to shifts in market capitalization, liquidity, and technological innovation.
Grayscale Decentralized AI Fund: Livepeer Added
In line with its proprietary methodology, the AI Fund underwent a strategic reallocation. The fund sold portions of its existing holdings proportionally and reinvested the proceeds into Livepeer (LPT) and current components. This marks the official inclusion of Livepeer—a decentralized video streaming infrastructure protocol—into the AI Fund’s basket of assets.
As of January 6, 2025, the updated composition is:
- NEAR Protocol (NEAR): 29.93%
- Render (RENDER): 20.58%
- Bittensor (TAO): 19.03%
- Filecoin (FIL): 17.18%
- The Graph (GRT): 10.45%
- Livepeer (LPT): 2.83%
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This addition reinforces the fund’s focus on protocols enabling decentralized artificial intelligence, edge computing, and distributed data networks—sectors poised for long-term growth as AI becomes more democratized and less reliant on centralized cloud providers.
Grayscale DeFi Fund: Curve In, Synthetix Out
The DeFi Fund, which tracks the CoinDesk DeFi Select Index, executed a methodology-driven rebalance by removing Synthetix (SNX) and allocating capital toward Curve (CRV) and existing holdings. This change reflects shifts in market cap weightings and ecosystem maturity within the decentralized finance space.
Post-rebalance holdings as of January 6, 2025:
- Uniswap (UNI): 47.88%
- Aave (AAVE): 27.87%
- Lido (LDO): 9.75%
- MakerDAO (MKR): 7.79%
- Curve (CRV): 6.71%
Curve’s inclusion highlights its enduring role in stablecoin liquidity provision and yield efficiency—critical components in a maturing DeFi landscape. Meanwhile, Synthetix’s removal does not reflect on its long-term potential but rather adherence to index rules based on market data.
Investors should note that DEFG’s share price may trade at premiums or discounts to its net asset value due to OTC market dynamics—a factor to consider when evaluating short-term performance.
Grayscale Digital Large Cap Fund: Cardano Replaces Avalanche
Aligned with the CoinDesk Large Cap Select Index, GDLC made a notable shift by exiting Avalanche (AVAX) and introducing Cardano (ADA) into its portfolio. This change responds to relative market cap movements among top-tier digital assets.
The updated allocation is:
- Bitcoin: 73.52%
- Ether: 16.16%
- XRP: 5.05%
- Solana (SOL): 3.83%
- Cardano (ADA): 1.44%
This rebalance maintains GDLC’s mission of providing broad exposure to the most established and liquid digital assets. Bitcoin and Ether continue to dominate the portfolio, reflecting their foundational roles in the crypto ecosystem.
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Grayscale Smart Contract Platform Ex-Ethereum Fund Adds SUI
The GSCPxE Fund, designed to track non-Ethereum smart contract platforms via the CoinDesk Smart Contract Platform Select Ex ETH Index, added Sui (SUI) to its lineup. The fund sold down existing positions proportionally to fund this addition.
New weightings effective January 6, 2025:
- Solana (SOL): 55.22%
- Cardano (ADA): 20.82%
- Avalanche (AVAX): 9.52%
- Sui (SUI): 7.93%
- NEAR Protocol (NEAR): 3.85%
- Polkadot (DOT): 2.66%
Sui’s integration recognizes its growing traction as a high-performance Layer 1 blockchain optimized for scalability and low-latency applications—key traits for next-gen dApps and gaming ecosystems.
Key Considerations for Investors
It is important to note that none of these funds generate income. Ongoing operational expenses are paid through periodic distributions of fund components, meaning the total holdings per share gradually decrease over time.
Additionally:
- Holdings and weightings are subject to quarterly reviews and may change.
- Investors cannot directly invest in an index.
- Secondary market trading (e.g., OTCQB for DEFG) may result in shares trading at significant premiums or discounts to intrinsic value.
- Regulatory approval for broader exchange listing is not guaranteed.
Frequently Asked Questions
Q: Why did Grayscale remove Avalanche from GDLC?
A: The decision follows the CoinDesk Large Cap Select Index methodology, which adjusts components based on market capitalization and liquidity criteria. AVAX fell below inclusion thresholds during the review period.
Q: What is the significance of adding Livepeer to the AI Fund?
A: Livepeer enhances the fund’s exposure to decentralized compute networks critical for AI-driven video processing and streaming—areas seeing rising demand as AI models require massive computational resources.
Q: Can I invest directly in these funds?
A: Accredited and institutional investors may be eligible to purchase shares privately. Retail investors should consult financial advisors about availability and risks.
Q: Why do these funds trade at premiums or discounts?
A: Unlike ETFs with creation/redemption mechanisms, these OTC-traded products lack arbitrage efficiency, leading to pricing deviations from net asset value.
Q: How often are fund compositions updated?
A: All four funds undergo quarterly rebalancing, typically reflecting changes at the start of each new quarter.
Q: Is there a risk these funds lose value?
A: Yes. Digital assets are highly volatile. Extreme price swings could lead to substantial or total loss of investment value over time.
Core Keywords Integration
Throughout this update, key themes emerge—decentralized AI, DeFi investing, smart contract platforms, crypto fund rebalancing, digital asset exposure, large-cap cryptocurrencies, and quarterly portfolio adjustments—all central to understanding modern crypto investment strategies.
Grayscale continues to serve as a bridge between traditional finance and the digital economy, offering structured access to emerging blockchain innovations while maintaining transparency through regular disclosures.
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As blockchain technology evolves, so too will the composition of these funds—ensuring investors remain positioned at the forefront of digital asset innovation.