The U.S. Securities and Exchange Commission (SEC) has greenlit the conversion of Grayscale Investments’ Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF), marking a significant milestone for cryptocurrency adoption in regulated markets. This approval allows index ETFs to hold crypto assets beyond Bitcoin (BTC) and Ethereum (ETH), expanding investor access to diversified digital asset exposure.
Key Details of the Approval
- Fund Structure: GDLC, launched in 2018 as a private placement, manages approximately $775 million in assets. It currently allocates 91% to BTC and ETH, with the remainder held in XRP, Solana (SOL), and Cardano (ADA).
- Regulatory Timeline: The NYSE ARCA filed the proposal in 2024, with the SEC issuing its approval on July 2, 2025.
- Market Context: This follows the launch of U.S. spot Bitcoin ETFs (January 2024) and Ethereum ETFs (July 2024), as well as combined BTC/ETH products by Hashdex and Franklin Templeton (February 2025).
Industry Reactions
Grayscale ETF lead David LaValle had previously anticipated this move, citing "productive conversations" with regulators. Bloomberg Intelligence analysts Seyffart and Balchunas projected the approval, noting its potential to pave the way for similar products like Bitwise’s 10 Crypto Index Fund (BITW).
FAQs
1. What cryptocurrencies does GDLC hold?
GDLC primarily holds BTC (51%) and ETH (40%), with smaller allocations to XRP, SOL, and ADA.
2. How does this differ from existing crypto ETFs?
Previous U.S. spot ETFs were limited to BTC or ETH. GDLC’s approval broadens exposure to altcoins within a regulated framework.
3. What’s next for the fund?
Grayscale must now secure SEC validation of the fund’s registration statement before finalizing the ETF conversion.
Implications and Future Outlook
The SEC’s decision signals growing acceptance of diversified crypto investment vehicles. However, pending rulings on single-asset funds (e.g., XRP or ADA ETFs) could further reshape the landscape. Analysts emphasize cautious optimism, as altcoin allocations remain minor compared to BTC/ETH dominance.
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