Grayscale Investments has launched Grayscale Model Portfolios, a suite of models that provide suggested allocations across digital assets.
The launch includes four models, each pursuing a different investment objective. The models incorporate asset selection, position sizing, diversification and rebalancing into their methodology. Grayscale Advisors will deliver the models directly to financial platforms used by financial advisors.
“Advisors are increasingly looking for ways to bring digital assets into client portfolios without having to build and maintain allocations asset by asset,” Laurie Katz, global head of distribution at Grayscale, said in a statement. “Grayscale Model Portfolios are designed to meet that need, combining our portfolio construction expertise with more than a decade of digital asset experience so advisors can offer clients thoughtfully constructed digital asset exposure through a single, familiar framework.”
The Digital Assets Core Plus model will focus on broad exposure to established digital assets, including Bitcoin and Ethereum, as well as select additional assets such as Solana and Chainlink.
The Digital Assets Leaders model will focus on accessing market-leading assets through exposure to the five largest eligible digital assets held in single-asset Grayscale exchange-traded products. The portfolio will adjust its holdings based on evolving market leadership positions.
The Digital Assets Next Gen model will provide exposure to up to 10 established and emerging digital assets across the broader digital asset market, excluding Bitcoin.
The Digital Assets Infrastructure model will provide exposure to digital assets underlying protocols that support smart contracts, tokenization and other applications across the digital asset economy.
All four model portfolios will be market-cap weighted and subject to a 40% cap per asset. The portfolios will be rebalanced on a quarterly basis.
Asset managers focusing on digital assets have been broadening the range of wrappers to help advisors access these investments. Over the past few years, tools that help advisors provide clients with exposure to digital assets have grown in sophistication, ranging from crypto-focused ETFs to model portfolios and SMAs.
In February, crypto asset manager Bitwise launched seven model portfolios focused on digital assets and tailored to fit a variety of risk preferences. These models invest in digital assets and related themes through Bitwise’s own and third-party ETFs.
Meanwhile, digital asset platform Eaglebrook Advisors has been running SMAs that allow advisors to invest directly in crypto assets for several years, reportedly working with over 100 wealth management firms.
While advisors may be showing an increased appetite for exposure to digital assets, such investments carry heightened risks. A study conducted by Wilshire Indexes found that in traditional portfolios, allocations to Bitcoin exceeding the 1% to 2% range lead to a significant concentration of risk.