Grayscale Investments has filed with the SEC to convert its Digital Large Cap Fund into a publicly traded ETF.
Fund Composition
The Grayscale Digital Large Cap Fund is currently a private investment vehicle available only to accredited investors. It holds a major portion in Bitcoin, making up 79.4% of its assets. Other holdings include: Ethereum (10.69%), XRP (5.85%), Solana (2.92%), and Cardano (1.14%). Cardano was added to the fund in January 2025, replacing Avalanche (AVAX) after an index rebalancing. The structure of the fund is expected to largely remain the same, apart from its conversion into a publicly traded ETF, though details like management fee percentage are still subject to change.
Significance of the Filing
The conversion of GDLC into an ETF can make it easier for retail investors to access a broader crypto market, allowing them to buy and sell shares on traditional stock exchanges. The fund covers 75% of the crypto market capitalization excluding stablecoins and meme coins, making it one of the most comprehensive crypto index funds in play.
Crypto ETF Competition
Since the SEC approved the first Bitcoin spot ETFs in January 2024, the demand for crypto ETFs has surged. Grayscale is not alone; Canary Capital, 21Shares, and Bitwise are also actively developing crypto investment products. Regulators are gradually warming up to more diversified crypto products, although crypto ETFs still face hurdles. Responses to the numerous new applications, including plans to incorporate staking rewards and options trading, are yet to be received.
Grayscale's filing represents a significant step toward expanding investor access to crypto index products. SEC approval could lead to wider adoption of altcoin ETFs, playing a critical role in the evolution of crypto ETFs.
