03.07.2025 00:23
The U.S. Securities and Exchange Commission (SEC) has expedited its approval of Grayscale Investments' application to transform its Digital Large Cap Fund (GDLC) into a spot cryptocurrency exchange-traded fund (ETF). This landmark decision, announced in a Tuesday filing, marks a significant shift in the regulatory landscape for digital assets. The SEC's order, citing Section 19(b)(2) of the Exchange Act, explicitly approves the proposed rule change, as amended, on an accelerated timeline.
This approval, largely anticipated by market analysts, is fueled by the fund's composition. Bitcoin and Ethereum constitute approximately 90% of GDLC's holdings, a fact noted by Bloomberg ETF analyst James Seyffart on X as a key factor contributing to the SEC's favorable decision. The remaining allocation includes smaller percentages of Solana, Cardano, and XRP, details readily available on the fund's official website. Currently, GDLC trades over-the-counter, exclusively accessible to accredited investors. Its portfolio is heavily weighted towards Bitcoin (around 80%), followed by Ethereum (approximately 11%).
The SEC's green light for Grayscale's GDLC paves the way for further expansion within the crypto ETF market. This approval coincides with the impending launch of the REX Osprey Solana Staking ETF on Wednesday, representing the first crypto staking ETF in the U.S. Moreover, numerous other crypto ETF applications are currently under SEC review, encompassing a diverse range of assets, including XRP, Solana, Cardano, and even meme coins like Dogecoin. This surge in applications reflects a generally more supportive regulatory climate for cryptocurrencies, particularly following the return of President Donald Trump to the White House in January.
According to Nate Geraci, President of the ETF Store, the approval of Grayscale's GDLC serves as a crucial precedent. He anticipates that this decision will likely trigger subsequent approvals for individual spot ETFs focused on assets like XRP, Solana, and Cardano. Furthermore, the SEC may view GDLC's conversion as a valuable test case, providing valuable data and insights before approving ETFs tracking other cryptocurrencies.
