- The SEC granted accelerated approval for GDLC’s conversion into a spot ETF.
- GDLC becomes the first multi-asset crypto fund to move from a closed-end structure to an ETF.
- Approval follows years of SEC pushback and a pivotal court ruling in Grayscale’s favour.
Grayscale’s Digital Large Cap Fund (GDLC) has received fast-tracked approval from the US Securities and Exchange Commission (SEC) to convert from a closed-end fund, which was previously limited to accredited investors, into a publicly traded spot exchange-traded fund (ETF).
The SEC granted the greenlight on Tuesday, stating that the amended proposal had been “approved on an accelerated basis”. The move marks a pivotal step in widening access to crypto investment products.
The GDLC is composed of the five largest cryptocurrencies by market capitalisation and is based on the CoinDesk 5 Index. According to the SEC filing, the fund’s composition includes Bitcoin (80.2%), Ethereum (11.3%), Solana (2.7%), XRP (4.8%), and Cardano (0.81%). The ETF format ensures the fund’s share price more accurately tracks the value of its holdings, after expenses and liabilities.
Related: Grayscale Files for Spot Crypto Index ETF, Aiming to Bring BTC, ETH, SOL, XRP and ADA Under One Fund
From Closed-End Fund to ETF
The ETF will now trade on NYSE Arca and will be available to a broader pool of investors. Previously, it was only accessible over the counter by accredited investors. This change could signal regulatory openness to future ETFs based on smaller cryptocurrencies. The conversion follows similar transitions by Grayscale’s Bitcoin and Ethereum trusts.
Grayscale had previously sued the SEC for denying its Bitcoin trust conversion. In August 2023, a US judge ruled in Grayscale’s favour, criticising the SEC’s reasoning as “arbitrary and capricious”. The court’s ruling played a key role in Grayscale’s eventual approval for both its Bitcoin Trust and the GDLC ETF.
Grayscale pioneered crypto investment products that allowed investors to gain exposure to digital assets without managing private keys or wallets. The ETF conversion represents a maturation of the market and ends an era of closed-end crypto funds.
Nate Geraci, President of the ETF Store, suggested that the GDLC conversion could serve as a test case for broader ETF approval, given that XRP, SOL, and ADA combined make up less than 10% of the fund’s holdings.
Related: SEC Opens Public Comment on Franklin Templeton’s Proposed XRP and Solana ETFs
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