The Securities and Exchange Commission (SEC) has given the green light to Grayscale’s ambitious plan to convert its Digital Large Cap Fund (GDLC) into a spot exchange-traded fund (ETF). This approval, announced on Tuesday, marks a significant milestone for Grayscale, a prominent player in the digital asset management space, and opens new doors for wider ETF adoption in the crypto realm. The newly approved ETF will track a selection of major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), with Bitcoin making up a hefty 80% of the fund’s current weight.
A New Chapter for Grayscale
Grayscale’s transformation from a traditional fund to a spot ETF is far from just a procedural shift; it signifies a broader acceptance of digital assets in traditional investment portfolios. The fund, which launched back in February 2018, has already amassed a notable $755 million in assets under management. With an expense ratio of 2.5%, Grayscale’s ETF aims to offer investors a streamlined path to engage with the crypto market’s heavyweights through a single product.
Andy Baehr, head of product and research at CoinDesk Indices, didn’t hold back his enthusiasm: “We are thrilled to see SEC approval, paving the way for this Grayscale fund, benchmarked to the CoinDesk 5 Index, to be uplisted as an ETF, and enabling investors and advisors to capture the largest and most liquid digital assets in a single product.” He touted the fund’s potential to become the world’s largest multi-token digital asset ETF.
Market Ripple Effects
The SEC’s nod to Grayscale’s ETF is set to reverberate through the cryptocurrency market. This move could potentially lure a wave of institutional investments, enticing those who have been sitting on the sidelines due to regulatory uncertainties. The fund’s linkage to the CoinDesk 5 Index, a barometer for the most prominent digital currencies, ensures that investors are getting exposure to robust and liquid assets. This development aligns with broader global trends, such as Japan’s proposed crypto reforms, which aim to allow Bitcoin ETFs and reduce crypto taxes.
This development comes amid a broader trend of financial institutions increasingly warming up to digital assets. The approval could very well act as a catalyst for similar funds awaiting SEC decisions, the next in line being Bitwise’s 10 Crypto Index Fund (BITW). Notably, BITW seeks to convert into an ETF that includes a diverse array of cryptocurrencies, from Bitcoin and Ethereum to lesser-known tokens like Sui (SUI) and Chainlink (LINK). In a similar vein, the NYSE’s recent rule adjustment to list a Bitcoin-Ethereum ETF reflects a growing acceptance of crypto products in traditional financial markets.
Historical Context and Future Implications
Grayscale’s journey from launching GDLC in 2018 to receiving SEC approval in 2025 paints a vivid picture of the evolving regulatory landscape and growing acceptance of digital assets. Over the years, the fund has strategically positioned itself, capitalizing on the rising popularity and mainstream appeal of cryptocurrencies. The SEC’s decision may signal a shifting tide, where digital assets are increasingly viewed as legitimate components of a diversified investment portfolio.
Yet, questions linger. Will this trend continue its upward trajectory, or will it face hurdles as regulators grapple with the rapidly evolving digital asset ecosystem? Observers are keenly watching how this development influences other pending applications and whether it ushers in a new era of crypto ETFs.
In the wake of this approval, investors and analysts alike are contemplating the broader implications for the market. With the floodgates seemingly open, the conversation now shifts to what this means for the future of digital asset investments. As the industry matures, the balance between innovation and regulation remains a delicate dance—one that will undoubtedly shape the landscape in the years to come.
Source
This article is based on: SEC Approves Grayscale ETF That Includes BTC, ETH, SOL, XRP, ADA
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
