Grayscale Gets SEC Nod for Crypto ETF—With a Twist
The U.S. Securities and Exchange Commission gave Grayscale Investments the go-ahead Tuesday to convert its Digital Large Cap Fund (GDLC) into an exchange-traded fund. The twist? While Bitcoin dominates the fund’s holdings, it’ll also include Ethereum, XRP, Solana, and Cardano.
The approval wasn’t exactly a surprise. As Bloomberg ETF analyst James Seyffart pointed out on X (formerly Twitter), Bitcoin and Ethereum already make up about 90% of the fund’s assets. The SEC’s decision came just a day before its deadline—a notable shift from its past habit of dragging its feet or outright rejecting similar proposals at the last minute.
What’s Inside the Fund?
Grayscale’s fund mirrors the CoinDesk 5 Index, which tracks the five largest cryptocurrencies by liquidity. Bitcoin alone accounts for over 80% of the holdings, with Ethereum making up another 11%. The rest is split between Solana (2.8%), XRP (4.8%), and Cardano (0.8%), according to the SEC filing.
But here’s the thing: while the SEC seems comfortable with funds *mostly* tied to big players like Bitcoin and Ethereum, it’s still hesitant about ETFs focused entirely on smaller altcoins. That might explain why this one sailed through while others haven’t.
Crypto Markets Dip as Approval Rolls In
Oddly enough, the news didn’t give prices much of a boost. Bitcoin was down about 1.3% to around $106,000, while Ethereum slipped 2.4% to roughly $2,400. Solana took a sharper hit, dropping 6% to $148, and XRP and Cardano fell 1.1% and 4.4%, respectively. Maybe traders were expecting something more dramatic?
Grayscale hasn’t commented yet—Decrypt reached out, but so far, nothing.
Why This Approval Feels Different
For years, the SEC shot down spot Bitcoin ETF applications, often with little explanation. But Grayscale’s courtroom win in 2023—where a federal appeals court called out the SEC’s inconsistent reasoning—seems to have forced a change in approach. That case paved the way for last year’s spot Bitcoin ETF approvals, and now, this.
GDLC will trade on NYSE Arca, joining Grayscale’s previously converted Bitcoin and Ethereum trusts. Closed-end funds like these used to trade at wonky premiums or discounts due to supply-demand quirks, but ETFs should smooth that out.
Seyffart thinks this could be the start of a bigger trend. He tweeted that the “second half of 2025” might bring a “wave of new ETFs,” including ones tied to Dogecoin, Litecoin, and others. But for now, the SEC’s playing it safe—sticking with the heavyweights while keeping an eye on the rest.
*Edited by James Rubin*
