The U.S. Securities and Exchange Commission (SEC) has approved Grayscale Investments' application to convert its Digital Large Cap Fund into an ETF. This development opens new opportunities for cryptocurrency investors.
Fund Conversion to ETF
The GDLC fund will become a publicly traded ETF, allowing investors to gain exposure to several crypto assets within a single structure. The fund includes cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Cardano (ADA). The GDLC structure will be based on the CoinDesk 5 Index, which measures the performance of the five largest and most liquid digital assets.
Optimism for Altcoin Market
Earlier in the week, investment advisor Nate Geraci predicted a high likelihood of regulatory approval, noting a pro-crypto shift at the SEC and U.S. President Donald Trump's open endorsement of the industry. The green light, confirmed in a Monday filing, has sparked optimism among investors perceiving this as a positive indicator for future altcoin ETF approvals. Geraci also pointed out that the fund could serve as a low-risk 'test run' for the SEC before it begins to consider other crypto assets.
Expected Trading of GDLC
GDLC will join Grayscale's lineup of converted products following the approval of the firm's Bitcoin Trust ETF (GBTC) in January 2025. This represents one of the first regulated products tracking multiple digital assets. The fund's structure allows for daily share creation and redemption, potentially minimizing the premium and discount issues that affected GDLC as a closed-end fund. Grayscale has indicated that any asset subject to enforcement action may be removed from the index during rebalancing. Trading of the converted ETF is anticipated to begin shortly, pending operational readiness and exchange coordination with NYSE Arca.
The SEC's approval of GDLC's conversion to an ETF signals new opportunities for cryptocurrency investors and highlights a positive trend concerning altcoin ETFs. This could also lead to further steps in legitimizing the cryptocurrency ecosystem.
