Grayscale investment, one of the worlds largest crypto asset manager with over $35 billion in asset under management, has launched Grayscale PYTH Trust as per Solid Intel, Binance News and PanNews. This is Grayscale’s first dedicated investment vehicle for the Pyth Network (PYTH).
Immediate Impact on PYTH token
The announcement caused a uptick in the price of the PYTH token. In the past hour, the token has experienced a surge of 4.5% as per CoinGecko. At press time, the price of the token stands at $0.2179 with a surge of 0.2% in the last 24 hours. This behavior was expected as similar reactions were observed when Grayscale introduced trusts for Bittensor (TAO) and Sui (SUI) in August 2024. The prices of the PYTH token are expected to surge even higher in the coming weeks.
Moreover, this PYTH Trust will allow the accredited investors to gain exposure to the token through a regulated structure and will save the hassle of holding the token in direct custody by the investor. This will also allow access to decentralized price data through the Pyth Network.
Pyth Network, a decentralized oracle aggregating real-time financial data from institutions like CBOE and Jane Street has seen its usage grow simultaneously with Solana’s DeFi expansion. The network currently secures over $3.9 billion in total valued locked (TVL) across platforms like Jupiter Exchange and Drift Protocol.
This endorsement by Grayscale will validate the network’s infrastructure, which supports pricing for derivatives, lending protocols and AI-driven trading platforms.
Broader Implications for Crypto Markets
The launch of this trust by Grayscale reflects a strategic move towards high-utility tokens within modular blockchain ecosystems. Unlike earlier trusts which were mainly focused on Layer-1 tokens (NEAR and STX), with the launch of the new product, the focus will shift on a niche token that allows seamless communication between different blockchain systems. This move indicates that Grayscale is interested in supporting technologies that improve blockchain interoperability.
Moreover, by investing in PYTH, the investment firm is intensifying the competition with the existing oracle networks, which mainly includes Chainlink, which has been dominating the space since 2021. The PYTH network is capable enough to provide low-latency data feeds and institutional partnership, which addresses a gap in real-time trading applications that Chainlink has not addressed yet.
Risks and Market Dynamics
While the new PYTH Trust is all exciting for the investors, there are some potential risks to be considered. Historically, Grayscale’s trusts have traded at a much higher price than their actual value. This can lead to a big loss if the price drops. For example, Grayscale’s Solana Trust is currently trading at a price that is 660% higher than its actual value.
According to Pyth Network Token’s Whitepaper, the tokens are said to be unlocked at a specified interval which will cause the token prices to drop. However, with the involvement of institutions like Grayscale and others who may follow the same footsteps, the acceptance of the token is bound to increase in the coming years.
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