Grayscale Investments has filed with the SEC to convert its Digital Large Cap Fund, which includes Bitcoin, Ethereum, Solana, XRP, and Avalanche, into an ETF.
Grayscale Investments, the biggest asset manager in the crypto business, has changed how cryptocurrency investment products work.
People at the company have asked the US Securities and Exchange Commission (SEC) to turn their Digital Large Cap Fund into an exchange-traded fund (ETF).
The goal of the Digital Large Cap Fund, which holds Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Avalanche (AVAX), is to give buyers access to a group of major cryptocurrencies. Just earlier this year, Grayscale successfully turned its Bitcoin Trust and Ethereum Trust into spot ETFs. This move comes after that.
The New York Stock Exchange sent Grayscale’s application on its behalf using a 19b-4 form. This is part of the company’s ongoing work to make it easier for more people to trade in cryptocurrencies through regulated, traditional financial products.
The Digital Large Cap Fund is meant to follow the success of the 20 biggest digital assets by market value. Bitcoin is given the most weight, followed by Ethereum.
Crypto-based ETFs are becoming more popular, which is why this new filing happened. Recently, other financial firms have done the same thing.
Canary Capital put in for a Litecoin ETF, pointing out that the cryptocurrency’s blockchain has been around for a long time and that it could be used in business situations. Canary Capital and Bitwise have both also put in applications for XRP ETFs.
The rising number of ETF applications shows that Wall Street institutional investors want broader cryptocurrency exposure. Nate Geraci, President of ETF Store, has noticed this trend, which shows that people want more crypto-based investment goods than just Bitcoin and Ethereum.
Given the governing environment, Grayscale’s move is especially interesting. The SEC has been worried about some cryptocurrencies, including Solana, which it says is an unregistered investment.
However, the regulator’s stance has changed, as shown by the fact that it recently approved Ethereum ETFs after being hesitant at first.
The company’s plan for this conversion is similar to what it did successfully with the Bitcoin Trust conversion. This past year, Grayscale won a court case against the SEC. This made it possible for crypto ETFs to be approved in the US. The court said that the SEC didn’t have a good reason for turning down Grayscale’s plan to turn Bitcoin Trust into an ETF.
The Digital Large Cap Fund could become an ETF if it is approved. This would give investors a new way to invest in a diversified portfolio of big cryptocurrencies through a regulated vehicle. This could possibly make the crypto market more liquid and easier for buyers to get into.
However, it’s still not clear what the SEC will do in answer to these many filings. The governing body has not yet acknowledged Bitwise and Canary Capital’s filings for an XRP ETF, and it is unclear how it will handle funds that hold a mix of cryptocurrencies.
Grayscale said that this filing shows that they are dedicated to making the crypto asset class easier for all investors to acquire.
The fund, currently traded under the name GDLC, wants to meet the growing demand for a wide range of crypto investments by holding a collection of the best digital assets on the market.
