SEC Approves Grayscale’s Digital Large Cap Fund Conversion to Multi-Asset Crypto ETF

• The SEC approved Grayscale’s Digital Large Cap Fund conversion to a spot ETF, creating the first regulated multi-crypto investment product for U.S. investors.

• The fund holds Bitcoin, Ethereum, XRP, Solana, and Cardano, with Bitcoin making up over 80% of the portfolio and other cryptocurrencies holding smaller positions.

• More crypto ETFs are expected soon, and Bloomberg analysts estimate a 95% approval probability for Solana and XRP ETFs by the end of 2025.

The U.S. Securities and Exchange Commission has approved Grayscale Investments to convert its Digital Large Cap Fund (GDLC) into a spot exchange-traded fund. This landmark decision creates the first regulated investment vehicle offering exposure to five major cryptocurrencies within a single ETF structure.

The fund combines Bitcoin, Ethereum, XRP, Solana, and Cardano under one investment product. The fund manages $755 million in assets and has traded on over-the-counter markets since 2019. The approval represents a significant expansion of crypto investment options for traditional investors seeking diversified digital asset exposure.

Bitcoin dominates the fund’s composition with over 80% allocation. Ethereum follows with 11% of holdings. The remaining cryptocurrencies maintain smaller but meaningful positions: XRP at 4.8%, Solana at 2.8%, and Cardano at 0.8%. This weighting reflects market capitalization priorities while providing exposure to alternative digital assets.

Regulatory Momentum Builds for Crypto ETFs

The approval follows Grayscale’s successful legal challenge that converted its Bitcoin Trust to a spot Bitcoin ETF in 2024. This victory established important regulatory precedent and demonstrated the SEC’s evolving stance toward cryptocurrency investment products.

Bloomberg ETF specialist James Seyffart suggested the approval could facilitate future multi-asset crypto ETFs. The SEC’s willingness to approve products containing alternative cryptocurrencies beyond Bitcoin and Ethereum signals a notable policy shift.

Industry experts had predicted the approval based on regulatory momentum favoring crypto ETFs. ETF Store President Nate Geraci anticipated success due to established precedents and ongoing dialogue between Grayscale and regulators. The company submitted amended S-3 filings throughout the approval process, indicating active regulatory engagement.

Market Impact and Future Prospects

The approval eliminates the need for investors to purchase individual cryptocurrency ETFs or manage separate digital asset positions. Investment professionals can now access diversified crypto exposure through traditional brokerage accounts and retirement plans. This accessibility could drive institutional adoption of digital assets previously limited by regulatory uncertainty.

Additional crypto ETF approvals appear imminent. The SEC is actively reviewing applications for single-asset ETFs tracking Solana and XRP. Bloomberg analysts estimate approval probability at 95% for these proposals by the end of 2025. This suggests accelerated regulatory acceptance of cryptocurrency investment products.

The commission is also considering procedural changes that would streamline ETF approval processes. Eliminating the 19b-4 filing requirement could reduce approval timelines and administrative burdens for fund managers. Such changes would benefit issuers and investors by creating more efficient market entry pathways.

The Grayscale conversion establishes a template for future multi-asset crypto ETFs. Fund managers will likely develop similar products targeting cryptocurrency combinations or investment strategies. This innovation could lead to more sophisticated crypto investment products resembling traditional equity or bond ETF markets.