tl;dr
The SEC has approved the conversion of the Grayscale Digital Large Cap Fund into an ETF, allowing investors to access a diversified portfolio of the five largest cryptocurrencies: Bitcoin, Ethereum, XRP, Solana, and Cardano. Bitcoin dominates the portfolio at about 80%, followed by Ethereum at 11%. ...
The Securities and Exchange Commission (SEC) has given the green light to convert the Grayscale Digital Large Cap Fund into an exchange-traded fund (ETF), completing the shift from a crypto index product to an ETF structure. This transformation allows investors to access a diversified basket of the five largest cryptocurrencies by market capitalization—Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA)—through trust units issued by the ETF.
The portfolio weights at the time of approval reflect the dominance of Bitcoin, at approximately 80%, followed by Ethereum at 11%, XRP at 4.8%, Solana at 2.8%, and Cardano at 0.8%. With non-GAAP assets under management totaling around $775 million as of June 30, the fund has been available since 2018 and has traded over the counter under the ticker GDLC since 2019. The conversion will allow the product to be listed on NYSE Arca, shifting to continuous trading and enabling on-exchange creation and redemption mechanisms.
This regulatory milestone was facilitated by an amendment to the NYSE Arca Rule 8.500-E, which now permits Trust Units issued by limited-liability companies and recognizes index-based portfolios. The SEC highlighted the exchange’s surveillance mechanisms and asset-quality standards, ensuring compliance with Section 6(b)(5) designed to prevent fraud and market manipulation. The approval also signals optimism about upcoming crypto ETFs, including the anticipated debut of the first spot Solana ETF in the United States and a broader wave of ETF approvals expected this summer.
Moreover, this development paves the way for other crypto basket funds to transition into ETF formats. Bitwise has proposed uplisting its $1.3 billion Bitwise 10 Crypto Index Fund (BITW) as an exchange-traded product, while Hashdex seeks to expand its Nasdaq Crypto Index US ETF to include seven more altcoins before converting the entire trust. Franklin Templeton has also prepared filings to launch its own crypto index ETF, aiming to convert current basket assets into an exchange-traded product once regulatory approval is secured.