Metalpha Launches Grayscale-Based Digital Asset Fund

Metalpha, based in Hong Kong, is introducing a regulated fund that will provide investors with exposure to Grayscale’s digital asset products, including the Grayscale Bitcoin Trust (GBTC), as well as the opportunity to redeem shares.

Metalpha is dubbing this fund the ‘Next Generation Fund,’ and it is aiming to raise $100 million, with $20 million already invested since the fund’s inception in March.

“We are thrilled to be collaborating with NextGen Digital Venture on the Fund’s launch, as we continue to strive for product innovation for our traditional finance clients.” Grayscale is one of the world’s largest digital asset fund managers, and we are confident about Grayscale’s future expansion, which will be fueled by crypto adoption, said Adrian Wang, President of Metalpha Technology Holding, in a statement.

Digital Currency Group, CoinDesk’s parent business, owns Grayscale. “Our fund is appealing to investors because it is very common and simple to participate in, and it is fully compliant with both Hong Kong and US regulations.” “Because of the current bear market, investing in GBTC, for example, can offer more competitive returns to investors,” Wang stated in a note to CoinDesk.

Because of the broad availability of bitcoin ETFs and a lack of redemption options for Grayscale’s crypto trusts, Grayscale’s crypto products have traded at a discount since March 2021. While the GBTC discount reached a record 50% in December, it is now only about 36%.

The opportunity to gain exposure to Grayscale’s products and redeem them at a discount to market pricing should pique the interest of bullish investors with a lengthy time horizon and an interest in arbitrage plays.

According to investment paperwork obtained by CoinDesk, shares in the fund have a 1.5-year lockup period, after which they can be redeemed on designated redemption days that occur monthly.