In a significant development for the expansion of the cryptocurrency market, Grayscale Investments has initiated the process to convert its Digital Large Cap Fund into an exchange-traded fund (ETF).
The New York Stock Exchange (NYSE) submitted the required 19b-4 documentation to the Securities and Exchange Commission (SEC) on October 15 on behalf of Grayscale.
The proposed ETF would derive its value from a diverse portfolio of digital assets, including XRP, marking a potential milestone as the first multi-cryptocurrency ETF in the U.S. Currently operating as GDLC, the Digital Large Cap Fund manages approximately $524 million in assets and trades over-the-counter at $23.15 per share as of October 15.
The fund’s current allocation consists of Bitcoin (75%), Ethereum (18%), Solana (4.16%), XRP (1.76%), and Avalanche 0.66%. Should regulators approve this conversion, it would establish a groundbreaking investment option, offering Americans their first ETF exposure to cryptocurrencies such as XRP, Solana, and Avalanche through a regulated investment product.
Industry-Wide Movement Toward Cryptocurrency ETFs
Grayscale’s filing joins a growing trend of financial institutions seeking cryptocurrency ETF approvals. After years of pressure and growing interest from investors, the SEC approved Bitcoin ETFs in January, and this move played a major role in sending it to a new all-time high in March.
Ethereum ETFs received approval later in the year, and other crypto communities are pushing for ETFs for their preferred digital assets.
Franklin Templeton recently submitted documentation for a combined Bitcoin and Ethereum Index ETF, while firms such as Bitwise and Canary have pursued standalone XRP ETF offerings. Additionally, prominent investment firms Ark Investment and VanEck have submitted applications for Solana ETFs.
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Political Landscape and Regulatory Implications
The surge in ETF applications coincides with the approaching November presidential elections, reflecting increased industry optimism about potential regulatory changes.
With SEC Chair Gary Gensler in hot water and pro-crypto stances from both U.S. presidential candidates, major changes could come as soon as the new administration takes over.
ETF Store president Nate Geraci believes the growing applications indicate growing confidence among cryptocurrency companies regarding possible regulatory reforms under new leadership.
The transformation of Grayscale’s Digital Large Cap Fund would represent a significant advancement in cryptocurrency investment accessibility, potentially paving the way for broader institutional adoption of digital assets through regulated investment vehicles.
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