ADA and ATOM thrown out of Grayscale's large cap holdings after portfolio rebalancing

Cardano (ADA) was removed from crypto asset manager Grayscale Investment Digital Large Cap Fund (GDLC) after rebalancing its funds based on their Q1 review. Based on CoinDesk's industry sector indices, the review also saw Cosmos (ATOM) leaving the crypto asset manager smart contract platform ex-Ethereum Fund (GSCPxE).

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ADA and ATOM down after Grayscale portfolio adjustment

Cardano's price plunged 3.2% on Friday after Grayscale Investment announced in a press release on April 4 that it sold its holdings of ADA in the GDLC portfolio and used the cash proceeds to buy existing components of the fund "in proportion to their respective weightings."

The fund rebalancing saw GLDC's components comprising Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Avalanche (AVAX), with respective weightings of 70.96%, 21.84%, 4.52%, 1.73% and 0.95%.

ATOM also saw a 3.8% decrease in the past 24 hours after Grayscale sold off its holdings of the asset in its GSCPxE portfolio. They used the cash proceeds to rebalance the fund by purchasing existing components based on weightings. The other components of the fund include SOL, ADA, AVAX, Polkadot (DOT) and Polygon (MATIC) with respective weightings of 58.41%, 14.56%, 12.25%, 8.53%, and 6.25%, respectively.

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The sale comes as Grayscale adjusts the portfolio every quarter to either remove or include new components based on CoinDesk's industry sector indices. For example, its DeFi Fund remained the same without any removal or addition as the CoinDesk DeFi index didn't change its assets. However, Grayscale adjusts the weightings of each fund’s components daily based on changes in the indices they track.

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Following Grayscale's announcement of the ADA sale from the GLDC rebalancing, Cardano founder Charles Hoskinson made a satirical post on X saying, "Wall street gives, wall street takes." Such a comment may refer to the growing influence of traditional finance on the crypto market.