The U.S. Securities and Exchange Commission has approved Grayscale's request to convert its Digital Large Cap Fund into an exchange-traded fund (ETF). This decision allows the fund to trade on NYSE Arca.
SEC Approval and ETF Structure
According to a July 1 SEC filing, approval allows the fund to list and trade on NYSE Arca, marking its transition from a private trust into a fully regulated ETF. The fund tracks the CoinDesk 5 Index, which includes cryptocurrencies like Bitcoin, Ethereum, XRP, Solana, and Cardano.
History and Composition of the Fund
Grayscale's Digital Large Cap Fund was launched in 2018 and has traded over the counter under the ticker GDLC since 2019. At the time of SEC approval, the fund was composed of approximately 80.2% Bitcoin, 11.4% Ethereum, 4.8% XRP, 2.8% Solana, and 0.8% Cardano. Assets are valued daily based on CoinDesk reference rates and rebalanced quarterly.
Future of Crypto ETFs and Recommendations
The SEC approved the change through an accelerated rulemaking process. It also allowed amendments to NYSE Arca’s rules to permit ETFs structured as limited liability companies based on index-tracked portfolios. To meet regulatory standards, at least 85% of the fund's assets must consist of digital assets already backing SEC-approved products.
Grayscale's approval could pave the way for other firms looking to create multi-asset crypto ETFs, potentially reshaping the cryptocurrency market.
