- Grayscale Investments has asked the SEC for permission to convert its Digital Large Cap Fund, which includes Solana, XRP, and Avalanche, into an ETF.
- The New York Stock Exchange filed the request on behalf of Grayscale, submitting the 19b-4 form to the SEC.
- Grayscale previously converted its Bitcoin Trust and Ethereum Trust into spot ETFs earlier this year after receiving SEC approval.
Grayscale Investments has asked the SEC for permission to convert its Digital Large Cap Fund—which includes Solana and more—into an ETF, according to a recent report by The Wall Street Journal. The fund currently gives investors exposure to major cryptocurrencies including Bitcoin, Ethereum, Solana, XRP, and Avalanche.
Background on Grayscale’s Conversion Efforts:
Grayscale previously converted its Bitcoin Trust and Ethereum Trust into spot ETFs earlier this year following SEC approval of each respective product in the US. The products once acted like closed-end funds, making it harder for investors to redeem shares. But following their conversion into the popular ETF investment vehicles, clients have fast been cashing out.
Grayscale’s Digital Large Cap Fund:
The Digital Large Cap Fund (GDLC) gives investors exposure to major cryptocurrencies. Bitcoin has the largest weighting in the fund, followed by Ethereum, Solana, XRP, and Avalanche. All assets in the fund make up the 20 biggest digital coins by market cap.
Grayscale’s Latest Filing and Statement:
Grayscale told Decrypt in a statement, “Today Grayscale filed to uplist Grayscale Digital Large Cap Fund as a diversified multi-crypto asset ETP on NYSE Arca. The fund is currently trading under ticker GDLC and continues to meet growing demand by providing diversified exposure to crypto through a portfolio of market-leading digital assets. This filing reflects Grayscale’s steadfast commitment to making the crypto asset class more accessible for all investors.”
The Potential Impact and SEC Stance:
ETFs promise investors easy exposure to assets such as crypto. An asset manager holds the investment in question and shares which track its price can be bought via brokerage accounts. However, the SEC has repeatedly alleged that Solana is an unregistered security, hitting crypto companies with lawsuits for selling the asset. The regulator was also initially reluctant to approve Ethereum ETFs, but has since relented.
Conclusion
Grayscale’s latest filing signals continued interest in crypto-backed ETFs following the SEC’s earlier approval of products from asset managers like Bitwise. However, it remains to be seen whether the regulator will approve an ETF containing coins like Solana and XRP that it has previously targeted with regulation.
