The U.S. Securities and Exchange Commission (SEC) recently acknowledged an application from Grayscale seeking to convert its Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF), a move that could make XRP part of a multi-asset spot ETF in the United States.
The Digital Large Cap Fund includes Bitcoin, Ethereum, Solana, and Avalanche alongside XRP, aiming to offer diverse exposure to several leading cryptocurrencies.
The application, submitted by NYSE Arca, proposes a rule change that would allow GDLC shares to be listed and traded as an ETF.
The SEC acknowledged the request under Section 19(b)(1) of the 1934 Securities Exchange Act. This move allows public feedback as part of the review process.
This acknowledgment is an early procedural step, but it opens up the conversation on the potential approval of a multi-asset spot crypto ETF.
Overview of Grayscale’s Digital Large Cap Fund (GDLC)
Launched on February 1, 2018, the GDLC fund is designed to offer exposure to multiple cryptocurrencies in one package, with Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Avalanche (AVAX) making up its assets.
As of the latest data, GDLC has a total asset value of around $558.84 million, with BTC and ETH representing the majority—76.26% and 17.20%, respectively. SOL, XRP, and AVAX make up smaller portions at 4.38%, 1.59%, and 0.57%.
If approved, GDLC would become the first multi-asset spot ETF for crypto in the U.S., marking a substantial development in the cryptocurrency space and potentially setting a path for future funds like it.
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Potential Implications
An ETF approval for the GDLC fund would provide XRP with added exposure to institutional capital, as investors may be more inclined to access a diverse cryptocurrency ETF.
An ETF approval may also positively affect the pending applications for spot-based XRP ETFs, like those from Canary Capitals and Bitwise, which seek to launch exclusive XRP ETFs.
However, the SEC has not approved these filings, which some analysts believe may be due to ongoing regulatory challenges related to the asset. The SEC is still involved in legal proceedings with Ripple Labs concerning the regulatory status of the digital asset. This case remains under appeal as Ripple and the SEC pursue further rulings on the token’s classification.
The potential approval of Grayscale’s GDLC ETF would be a significant milestone, creating a precedent for other digital assets in ETFs and potentially easing the way for more XRP-related funds.
Ripple CEO Brad Garlinghouse is confident that the SEC will permit XRP-based spot ETFs. Approval of Grayscale’s proposal would represent a major step in legitimizing digital asset ETFs and could increase investor interest in the token.
With the SEC’s acknowledgment of Grayscale’s application, the regulatory review period has officially started. Grayscale’s move toward an ETF incorporating multiple crypto assets represents a broader push for the acceptance and accessibility of digital assets in regulated markets.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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