Grayscale Investments has filed with the SEC to convert its Digital Large Cap Fund into an ETF, potentially expanding access to the crypto market.
What's in the Fund
The Grayscale Digital Large Cap Fund (GDLC) is currently a private investment vehicle for accredited investors. Its assets are primarily composed of Bitcoin (79.4%), Ethereum (10.69%), XRP (5.85%), Solana (2.92%), and Cardano (1.14%). In January 2025, Grayscale rebalanced the index by adding Cardano, replacing Avalanche. The S-3 filing indicates that the fund's structure will largely remain the same apart from its conversion into a publicly traded ETF.
Why This Filing Matters
If approved, the conversion of GDLC into an ETF will provide retail investors easier access to the broader crypto market. Unlike Grayscale’s current private fund, which restricts access to institutional and high-net-worth investors, an ETF would enable shares to be bought and sold on traditional stock exchanges. Grayscale's filing states that the fund represents 75% of the total crypto market capitalization, excluding stablecoins and meme coins, making it one of the most comprehensive crypto index funds.
The Race for Crypto ETFs Heats Up
Since the SEC approved the first Bitcoin spot ETFs in 2024, demand for crypto-based ETFs has surged. Ethereum spot ETFs were approved in May 2024, followed by a hybrid Bitcoin-Ethereum fund. Grayscale is not alone; Canary Capital, 21Shares, and Bitwise are actively pursuing crypto ETFs. Interest is also growing for a planned XRP ETF as the Ripple lawsuit nears resolution. NYSE Arca filed a listing request for the GDLC ETF in October 2024, indicating initial institutional interest.
Grayscale’s filing to convert the fund is a significant step toward expanding access to crypto index products. If the SEC approves the Digital Large Cap ETF, it could lead to broader adoption of altcoin ETFs. Grayscale's upcoming products indicate the industry’s push for diverse, regulated investment options.
