What Is the Grayscale Stellar Lumens Trust (GXLM)?

What is Grayscale Stellar Lumens Trust (GXLM)

Bittime - What is the Grayscale Stellar Lumens Trust (GXLM)? Find information about its meaning and current performance in this article.

One way to gain exposure to a crypto asset is through investment trust offered by companies like Grayscale Investments.

In this article, we will talk about Grayscale Stellar Lumens Trust (GXLM), which gives investors the opportunity to invest in Stellar Lumens (XLM), the native token of the Stellar network.

What is Greyscale Investments?

Grayscale Investments is a digital asset management company founded to provide investment products that enable investors, both individual and institutional, to gain exposure to cryptocurrencies.

The company is known for its so-called crypto investment products trusts. These products allow investors to invest in various cryptocurrencies without needing to directly manage or store those digital assets.

Grayscale offers a variety cryptocurrency trusts which allows investors to purchase shares that represent ownership of a particular digital currency. Some of the major cryptocurrencies that Grayscale offers include Bitcoin (GBTC), Ethereum (ETHE), Litecoin (LTCN), And Bitcoin Cash (BCHG).

As a United States-based company, Grayscale focuses on providing safe and well-managed investment vehicles. Especially, for investors who want to avoid the hassle associated with direct trading and storing cryptocurrencies.

Grayscale Stellar Lumens Trust (GXLM) is an investment product that allows investors to gain exposure to Stellar Lumens (XLM), the token used in the Stellar network.

Stellar itself is a blockchain network designed to facilitate cross-border transactions at low costs and high speed. XLM is used as a means of payment in this ecosystem.

GXLM is one of nine single-asset investment products offered by Grayscale. This product aims to help investors gain exposure to XLM price movements without having to buy or hold XLM directly.

These trusts allow investors to purchase shares that reflect the value of the XLM held by the trust, although these products do not provide direct ownership of the XLM itself.

In the GXLM structure, XLM is stored by Coinbase Custody Trust Company, LLC, who is responsible for maintaining the security of these crypto assets. While there is no direct redemption program within the trust, investors can buy or sell their shares through secondary market platforms.

Grayscale Stellar Lumens Trust (GXLM) Recent Performance

Source: Greyscale

Performance Grayscale Stellar Lumens Trust (GXLM) attracting the attention of investors who are interested in XLM. Based on the latest data, GXLM own Net Asset Value (NAV) per share is around $34.08 (around IDR 550,000), with total assets managed reached around $47 million (around IDR 760 billion).

Meanwhile, the stock market price per unit GXLM is trading at around $46 (around IDR 745,000) per share, which suggests a slight premium compared to NAV.

However, like most crypto-based investment products, GXLM also experienced significant volatility. Within a day, share prices can experience quite large fluctuations, both up and down.

For example, GXLM experienced a decrease of -10.53% in the NAV value per share in one day, while the market price of its shares increased by 1.63% on the same day.

Launch of Grayscale Stellar Lumens Trust (GXLM)

Grayscale Stellar Lumens Trust (GXLM) was launched on January 17, 2019. This is part of Grayscale's efforts to meet investor demand for products that provide exposure to XLM.

The launch of crypto-based assets is part of Grayscale's strategy to continue expanding their product portfolio. Bearing in mind, the increasingly high demand for cryptocurrency-based investment products.

Launch GXLM also coincided with Grayscale's rebrand, which changed the name of all their digital currency-based products to trusts.

This aims to make it easier for investors who want to invest in digital assets in a safer and more managed way, without having to worry about crypto wallet security or other potential technical risks.

FAQ

What Is the Stellar Lumens Grayscale Trust?

The Grayscale Stellar Lumens Trust (“Trust”) is one of the first securities to solely invest in and derive value from the price of Lumens (“XLM”) allowing investors to gain exposure to XLM in the form of securities while avoiding the challenges of buying, holding, and save XLM directly.

Is Stellar Lumens better than Bitcoin?

The main token of the Stellar blockchain is Stellar lumens (XLM). The Stellar blockchain uses a consensus algorithm that is faster, cheaper, and more energy efficient than Bitcoin.

How does the Grayscale Trust work?

Grayscale Trust operates as a “grantor trust,” meaning investors are treated as direct owners of the bitcoin held in the trust for tax purposes.

This structure requires investors to report gains or losses on the value of their shares on their personal tax returns, similar to other capital assets.

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Reference

finished What Do Grayscale Investments Mean? What is Grayscale Bitcoin Trust?, accessed December 19, 2024.

Cointelegraph, Grayscale Adds Stellar as Latest Cryptocurrency Investment Trust, accessed December 19, 2024.

Grayscale, GXLM, accessed December 19, 2024.

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