SEC greenlights Grayscale crypto index fund conversion to ETF

Trading on OTC Markets since 2019, the Grayscale Digital Large Cap Fund currently holds BTC, ETH, SOL, XRP and ADA

article-image

Unconventional/Shutterstock and Adobe modified by Blockworks

share

The SEC is set to allow an index ETF holding crypto assets beyond bitcoin and ether to start trading in the US, marking another regulatory win for issuers in the segment.

NYSE Arca filed last year to list shares of Grayscale Investments’ Digital Large Cap Fund (GDLC) as an exchange-traded product. The securities regulator on Tuesday essentially approved that proposal.

GDLC launched as a private placement in 2018 and began publicly trading on OTC Markets the following year; it has roughly $775 million of assets under management. While 91% of the fund’s assets are allocated to bitcoin and ether, it also holds XRP, solana (SOL) and cardano (ADA).  

Spot crypto ETFs have so far been limited to holding the two largest crypto assets. US spot bitcoin and ether ETFs launched in January 2024 and July 2024, respectively. Products holding a combination of BTC and ETH — issued by Hashdex and Franklin Templeton — hit the market in February.    

Read more: Crypto indexes offer ‘biggest opportunity’ as SEC decision looms: Hashdex CIO

Various industry observers and executives expected this approval. 

Grayscale ETF head David LaValle said on Nate Geraci’s Crypto Prime podcast in May that he anticipated a multi-token offering would be the next crypto ETF to launch — noting “good conversations” with the NYSE and SEC.

Bloomberg Intelligence analysts James Seyffart and Eric Balchunas wrote in a note last month that they expected the SEC to greenlight the conversions of GDLC — as well as the Bitwise 10 Crypto Index Fund (BITW) — to ETFs by the July 2 deadline.

BITW, which holds 10 crypto assets, also has a heavy combined weighting (nearly 90%) to BTC and ETH. 

“Having only small allocations to alternative coins might help their conversion bids even if the SEC hasn’t individually approved each asset for an ETF,” the Bloomberg analysts previously explained. 

Geraci, president of The ETF Store, had shared a similar view in an X post earlier this week. 

Loading Tweet..

It does not appear the SEC has made a ruling yet on whether the Bitwise fund can convert.  

While the Grayscale crypto index fund conversion has received an initial regulatory nod, the SEC will next have to deem the product’s registration statement effective before it can uplist to an ETF. 

The regulator is also weighing planned single-asset products that would hold SOL, for example — as well as ones that would invest in XRP, ADA, litecoin (LTC), dogecoin (DOGE), polkadot (DOT) and others. The SEC has until October to rule on a number of those.

This is a developing story.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

Mainnet goes live with a 16-node federation, promising five-second block times, low fees and Bitcoin-native DeFi

article-image

Sponsored

WalletConnect Certified is not just a recognition program, it’s a movement to improve how users onboard, transact, and engage across the onchain ecosystem

article-image

In crypto investing, quantity has a quality all its own.

article-image

REX and Osprey prep to launch their Solana staking ETF

article-image

A 40% allocation to crypto today is safer than a 1% allocation was in 2021, Ric Edelman argues

article-image

The wallet doesn’t have enough memory for more apps and features but should still function, the company says