The U.S. Securities and Exchange Commission (SEC) has approved Grayscale’s request to convert its Digital Large Cap Fund into a spot exchange-traded fund (ETF), marking a significant milestone for the crypto investment firm.
According to a filing published on July 1, the newly approved ETF will trade on NYSE Arca, officially transitioning the fund from a private trust into a fully regulated exchange-traded product. The fund tracks the CoinDesk 5 Index, which includes Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA).
At the time of approval, the fund’s composition was approximately 80.2% Bitcoin, 11.4% Ethereum, 4.8% XRP, 2.8% Solana, and 0.8% Cardano. Asset values are calculated daily using CoinDesk’s reference rates and the portfolio is rebalanced quarterly.
Originally launched in 2018, the Digital Large Cap Fund has traded over the counter under the ticker GDLC since 2019. With its ETF conversion, the fund will now offer daily share creation and redemption in 10,000-share blocks, settled in cash through authorized participants. The ETF’s net asset value (NAV) will be calculated each business day at 4:00 p.m. ET.
The SEC approved the transition via an accelerated rulemaking process, which also included amendments to NYSE Arca’s rules—permitting ETFs to be structured as limited liability companies and based on index-tracking strategies.
To comply with SEC requirements, at least 85% of the fund’s holdings must be composed of digital assets that underlie already-approved exchange-traded products. If the fund falls below that threshold, the manager must rebalance or halt trading to remain in regulatory compliance.
Grayscale has been actively pursuing ETF conversions for several of its crypto trusts. In 2023, the firm won a pivotal court case when a federal judge ruled the SEC’s prior rejection of its Bitcoin ETF application was “arbitrary and capricious.” Following the ruling, Grayscale’s Bitcoin Trust was converted into an ETF—now operating with a 1.5% expense ratio, the highest among its peers.
The SEC’s approval of Grayscale’s multi-asset ETF comes amid similar efforts by other firms. Bitwise, Hashdex, and Franklin Templeton have all submitted proposals to convert or launch diversified crypto ETFs. Grayscale’s approval could help set a regulatory precedent for future multi-asset crypto investment products.
