SEC Greenlights Grayscale’s Diversified Crypto ETF
The U.S. Securities and Exchange Commission gave Grayscale Investments the go-ahead to convert its Digital Large Cap Fund (GDLC) into an exchange-traded fund—one that’s heavy on Bitcoin but also holds Ethereum, XRP, Solana, and Cardano. The filing, made public Tuesday, marks another step in the slow but steady opening of crypto investment options for mainstream traders.
Bloomberg ETF analyst James Seyffart noted on X (formerly Twitter) that the approval wasn’t exactly a surprise. Bitcoin and Ethereum make up roughly 90% of the fund’s holdings, and regulators have warmed up to those two assets more than others. Still, it’s a shift from the SEC’s years-long resistance to crypto ETFs.
What’s in the Fund?
Grayscale’s GDLC mirrors the CoinDesk 5 Index, which tracks the five largest cryptocurrencies by liquidity. Bitcoin dominates at over 80%, with Ethereum taking another 11%. The rest is split between Solana (2.8%), XRP (4.8%), and Cardano (0.8%). It’s not a huge slice for the smaller coins, but it’s something—especially since the SEC has been hesitant to approve anything purely altcoin-focused.
Meanwhile, the crypto market’s been choppy. Bitcoin dipped to around $106,000, down 1.3% in 24 hours, while Ethereum slid 2.4% to roughly $2,400. Solana took a sharper hit, dropping 6% to $148, and XRP and Cardano weren’t far behind.
A Faster Approval Than Expected
What’s interesting here is the speed. The SEC spent over a decade rejecting spot Bitcoin ETFs before finally relenting earlier this year. This time, they signed off on Grayscale’s filing a day before their deadline—no last-minute “no” like in the past. GDLC will now trade as a full ETF on NYSE Arca, joining Grayscale’s previously converted Bitcoin and Ethereum trusts.
Closed-end funds like GDLC used to trade at odd premiums or discounts because of supply-demand quirks. Converting to an ETF should smooth that out, making pricing more straightforward for investors.
Seyffart hinted that this might just be the start. He suggested a “wave of new ETFs” could arrive by late 2025, with funds eyeing Dogecoin, Litecoin, and other altcoins. But for now, the SEC seems to prefer ETFs anchored by Bitcoin or Ethereum, with smaller coins playing a minor role.
Grayscale’s 2023 lawsuit against the SEC—which it won—helped pave the way for this shift. A court criticized the regulator’s inconsistent reasoning for rejections, and that pressure likely played a part in January’s spot Bitcoin ETF approvals.
No word yet from Grayscale on the latest move. Decrypt reached out, but as of now, it’s quiet. Maybe they’re too busy filing the next application.
