Grayscale Investments has unveiled the Grayscale Dynamic Income Fund, targeting sophisticated clients aiming to diversify their portfolios with income generated from staking cryptocurrency tokens.
The fund is exclusively available to clients with assets under management surpassing $1.1 million or a net worth exceeding $2.2 million.
The Grayscale Dynamic Income Fund plans to convert staking rewards into US dollars on a weekly basis, with quarterly distributions scheduled for investors. The fund prioritizes careful analysis in selecting proof-of-stake (PoS) tokens for its portfolio, aiming to maximize staking income with capital growth as a secondary objective.
Crypto staking involves locking up tokens to earn rewards, ensuring the secure operation of blockchain networks while generating interest for participants.
The fund will hold three primary PoS tokens: Osmosis (OSMO) with a 24% share, Solana (SOL) with 20%, and Polkadot (DOT) with 14%, while 43% will be allocated to other tokens.
Currently, OSMO offers a staking reward rate of 11.09%, SOL provides 7.42%, and DOT yields 11.9%, as per data from Staking Rewards. Notably, SOL ranks among the top 10 PoS tokens by market capitalization.
In contrast to the new fund, Grayscale’s spot Bitcoin exchange-traded fund (ETF), launched on Jan. 11, has witnessed significant outflows, totaling over $14 billion since inception.
Grayscale’s Bitcoin ETF imposes a management fee of 1.5% per year, significantly higher than the average fee of 0.30% for other spot Bitcoin ETFs.
Grayscale has applied for an Ethereum Futures ETF, although the approval decision from the United States Securities and Exchange Commission has been delayed.
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