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- Grayscale received SEC greenlight to transform its Digital Large-Cap Fund into a fully marketable ETF listed on NYSE Arca.
- The ETF comprises Bitcoin, Ethereum, Solana, XRP, and Cardano, with Bitcoin constituting more than 80% of the holdings.
Grayscale has received regulatory approval to transform its Digital Large-Cap Fund into a full-fledged exchange-traded fund (ETF), marking a milestone in Wall Street’s adoption of crypto. The U.S. securities regulatory body, the Securities and Exchange Commission (SEC), approved it on Tuesday, and the fund will be traded under ETF status on NYSE Arca.
The ETF will track the CoinDesk Large-Cap Select Index and measure exposure to the five largest digital assets ranked based on their market capitalization. According to updated weightings, Bitcoin (BTC) comprises approximately 80.2% of the portfolio, with Ethereum (ETH) close at 11.3%. Solana (SOL) obtains 2.7%, XRP 4.8%, and Cardano (ADA) 0.81%
This authorization has increased the history of Grayscale transforming closed-end crypto trusts to more liquid ETFs. This transition is indicative of a rising institutional appetite in regulated digital asset investment products and an increasingly softening-up approach to crypto-based funds by the SEC.
Court Victory Forces Regulator Shift
Grayscale was approved based on a historic legal fight in 2023. Grayscale submitted a lawsuit after the SEC denied its proposal to change the Bitcoin Trust into an ETF. The SEC was forced to reconsider when a federal appellate court later declared its rejection “arbitrary and capricious.” The court’s ruling turned out to be a pivotal moment, and it affected further approvals of spot Bitcoin ETFs.
Grayscale has previously converted the newly approved ETF, the GDLC. Its restructured Bitcoin and Ethereum trusts have been in compliance with ETF requirements in the past. GDLC is, however, notable in providing diversification exposure in one product. Investors will have access to a regulated index traded in and reflecting real-time price and weightings, minus fund costs and liabilities.
Any arbitrage possibilities commonly present in Grayscale ETFs’ predecessor, the private trusts, attributable to the supply-demand mismatch and the lock-up orders, will still be minimal under the new framework of ETFs, where redemptions are permitted in kind and the NAV is calculated daily.
More ETFs May Be Coming Soon
According to industry analysts, Grayscale’s victory may pave the way for more crypto ETF offerings in the second half of 2025. Bloomberg Eric Balchunas and James Seyffart have noted the increase in approval odds of ETFs related to Solana, XRP, and Litecoin, who predict a 95% probability of success.
Approval was our expectation. The fund is over 90% Bitcoin and Ethereum. The next big date is @Bitwise's $BITW deadline of July 31. But SEC could obviously go early…
We wrote about this and more here for Bloomberg terminal clients: https://t.co/7C0bO3pcxB pic.twitter.com/BdHNe7ZQsS
— James Seyffart (@JSeyff) July 1, 2025
The SEC seems to be warming up to ETFs that incorporate a combination of prevailing cryptocurrencies, specifically Bitcoin and Ethereum. Nevertheless, products dealing strictly with small altcoins are yet to be approved.
In a notable development, it is also reported that the agency is contemplating a simpler process for future crypto ETFs. The eligible issuer could file a standard S-1 form and go live with a 75-day review period after the regulator approved new token compliance standards, rather than the traditional 19b-4 filing. Such a shift may speed up ETF use and ease regulatory frictions.
