How XRP, MATIC were affected as Grayscale rebalances portfolio

• XRP now makes up over 1% of the Grayscale large fund portfolio.
• Polygon continues to decline after the market crash.

Grayscale recently adjusted its extensive portfolio of funds by adding and removing certain digital assets. Ripple [XRP] and Polygon [MATIC] were involved in this rebalancing, but what roles did they play?

XRP in, MATIC out

As per a recent update on X (formerly Twitter), Grayscale Investments, the manager of the Grayscale Digital Large Cap Fund, conducted a portfolio review. The review involved the rebalancing of digital assets within the fund.

According to the document, MATIC was removed from the fund while XRP was added. The remaining assets in the portfolio included Bitcoin [BTC], Ethereum [ETH], Cardano [ADA], Solana [SOL], and Avalanche [AVAX].

Bitcoin constituted over 69% of the portfolio, Ethereum accounted for 21.9%, and XRP represented over 1%.

Did XRP react to the development?

The recent adjustment in Grayscale’s portfolio, specifically the addition of XRP, did not impact the price trends of XRP, AMBCrypto found.

A closer examination of the chart showed that, since the beginning of 2024, XRP has experienced only two instances of price increase. 

Source: Trading View

As of this writing, AMBCrypto noted that XRP was seeing its second consecutive day of decline, trading at around $0.56. With this, it broke away from the $0.6 price range it had maintained.

The sustained price decrease has pushed XRP deeper into a bear trend, as shown by its Relative Strength Index (RSI). As of this writing, it was below 40, signaling a strong bearish trend.

Despite the ongoing decline, Grayscale’s decision to include XRP in its portfolio is grounded in anticipating a potential future price surge.

Although XRP did not witness a significant rise compared to other assets, there is optimism that it might experience a rally in the new year.

Polygon on a declining trend

Like XRP, MATIC has faced challenges in maintaining a favorable price trend since the beginning of the new year. The daily timeframe chart highlights a notable decline on the 3rd of January, a drop of over 13%.

Despite subsequent efforts, Polygon has struggled to regain positive momentum, with its price decreasing. At the time of this writing, it was trading at around $0.8, experiencing an additional decline of over 4%.

Read Ripple’s [XRP] Price Prediction 2024-25

This recent dip translated to a loss of nearly 8% over the last two days.

Source: Trading View

The recent decline has caused Polygon to dip below its short-moving average (yellow line), signaling a less positive trend in its price at press time. Additionally, the RSI line was approaching 40, indicating a strong bearish trend.