• On 6 January, Grayscale Digital divested its stakes in Avalanche [AVAX] in an attempt to rebalance its portfolio.
• As a result, AVAX was removed from the CoinDesk Large Cap Select Index and Grayscale Digital Large Cap Fund (OTCQX: $GDLC).
• The move affected less than 1% of Grayscale’s total assets under management.
On 6 January, Grayscale Digital, a leading digital asset management firm, announced the sale of its AVAX holdings as part of a portfolio rebalancing. This move was taken in an effort to consolidate the company’s investments and rebalance its portfolio. As a result of the divestment, Avalanche [AVAX] has been removed from the CoinDesk Large Cap Select Index and Grayscale Digital Large Cap Fund (OTCQX: $GDLC).
This news comes on the heels of Grayscale’s recent filing with the Securities and Exchange Commission (SEC) in 2022, in which the company reported its portfolio holdings, which included AVAX. The filing revealed that AVAX accounted for a proportion of its total assets under management that was less than one percent.
The divestment of AVAX was followed by disappointing price action, leading some to question whether the move from Grayscale had a more significant negative impact. Nevertheless, the company’s portfolio rebalancing was seen as a necessary step to ensure the most efficient allocation of assets.
Grayscale reported that in order to make room for Synthetix [SNX] in its DeFi Fund, Algorand [ALGO] was unloaded as well. The total amount of assets under management is now reported to be more than $164 million.
It remains to be seen whether the token will be able to shake off the negative implications of the divestment and continue its upward trend. For now, investors are watching closely to see how the market will respond to the news.