Grayscale Investments, a major player in the crypto investment space, has filed to convert its Digital Large Cap Fund into an exchange-traded fund (ETF). This significant move, if approved, will broaden investor access to a basket of leading cryptocurrencies.
Fund Composition
The Grayscale Digital Large Cap Fund (GDLC) is currently a private investment vehicle accessible only to accredited investors through private placements. The fund's asset allocation is heavily weighted towards Bitcoin at 79.4%. The remaining assets include: Ethereum (10.69%), XRP (5.85%), Solana (2.92%), Cardano (1.14%). Cardano was added to the fund in January 2025, replacing Avalanche (AVAX) after an index rebalancing.
Significance of S-3 Filing
The conversion of GDLC into an ETF will provide retail investors with an easy way to access the broader crypto market. Unlike Grayscale’s current private fund model, which restricts access to institutional and high-net-worth investors, an ETF would allow shares to be bought and sold on traditional stock exchanges. The filing states that the fund represents 75% of the total crypto market capitalization, excluding stablecoins and meme coins. This makes it one of the most comprehensive crypto index funds in play.
The Race for Crypto ETFs
Since the SEC approved the first batch of Bitcoin ETFs in 2024, the demand for crypto-based ETFs has surged. The industry has since seen the approval of Ethereum ETFs and a hybrid Bitcoin-Ethereum fund. Grayscale is not alone in expanding its ETF lineup. Several other asset managers, including Canary Capital, 21Shares, and Bitwise, are actively pursuing crypto investment products.
Grayscale's filing to convert the GDLC fund into an ETF is a significant step toward expanding investor access to crypto index products and could pave the way for broader acceptance and growth of cryptocurrency ETFs.
