01.07.2025 18:24

The Securities and Exchange Commission (SEC) has given the green light to Grayscale Investments' conversion of its Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF), a significant regulatory milestone. This approval paves the way for the first US ETF to trade crypto assets beyond Bitcoin and Ethereum, a development widely anticipated within the industry.

Initially launched as a private placement in 2018 and subsequently trading over-the-counter, GDLC boasts approximately $775 million in assets under management. While Bitcoin and Ethereum constitute a dominant 91% of its holdings, the fund notably includes other prominent cryptocurrencies such as XRP, Solana (SOL), and Cardano (ADA). This diversification sets it apart from existing US spot Bitcoin and Ethereum ETFs, which debuted in January and July 2024 respectively, and other dual-asset products launched earlier in the year.

The SEC's decision follows months of speculation and positive predictions from various industry experts. Grayscale's ETF head, David LaValle, had publicly forecast a multi-token ETF launch, citing promising communications with the NYSE and the SEC. Furthermore, analysts from Bloomberg Intelligence, James Seyffart and Eric Balchunas, accurately predicted the approval of both GDLC and the Bitwise 10 Crypto Index Fund (BITW) – another multi-asset crypto fund – before the July deadline. BITW, similar to GDLC, heavily weights Bitcoin and Ethereum, comprising almost 90% of its assets.

This landmark approval suggests a potential shift in the SEC's approach to crypto ETF applications, particularly regarding funds with diverse crypto holdings. The relatively small allocations to alternative cryptocurrencies within GDLC and BITW may have played a crucial role in securing approval, even without individual SEC asset approvals. The approval of these diversified funds marks a significant step forward for the broader cryptocurrency market's integration into traditional finance.