Grayscale, the world's largest crypto-focused asset manager, has announced the removal of Cardano's ADA token from its Grayscale Digital Large Cap Fund (GDLC) and Cosmos' token from its Grayscale Smart Contract Platform Ex-Ethereum Fund (GSCPxE). 

This decision comes as part of Grayscale's quarterly fund rebalancing, reflecting the company's strategic adjustments in response to market dynamics.

Worth noting, Cardano's ADA token has experienced a decline of 27% over the last 30 days, while Cosmos' ATOM token fell over 13%. The recent underperformance of ADA and ATOM has likely influenced Grayscale's decision to reallocate its portfolio holdings.

On the weekly chart, ADA has witnessed a significant drop of over 14%, slipping below the $0.6 psychological mark on April 2nd. Currently, it stands 81% away from its previous all-time high of $3.10 reached in September 2021. Similarly, ATOM has declined over 13% in the past week, trading at $10.8, which is 75% lower than its record high of $44.7 in September 2021.

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Rebalancing and New Fund Composition

According to reports, proceeds generated from selling ADA and ATOM tokens were utilized to buy existing fund components. Following the removal of ADA, Grayscale's large-cap fund now comprises 70.96% Bitcoin, 21.84% Ether, 4.52% Solana, 1.73% XRP, and 0.95% Avalanche. 

Notably, no new assets have been added or removed from Grayscale's DeFi Fund, maintaining its existing composition. It holds 48.74% Uniswap, 20.41% Maker, 13.17% Lido, 9.99% Aave, and 7.69% Synthetix tokens.

The new Grayscale Dynamic Income Fund targets clients with significant assets under management or high net worth.

In response to Grayscale's portfolio adjustments, Charles Hoskinson, the founder of Cardano, offered his perspective on the decision. His comment, "Wall Street give; Wall Street take," touches on the dynamic nature of investment strategies and the inherent volatility of the cryptocurrency market.