Grayscale Is Reportedly Converting Its Digital Large Cap Fund (GDLC) Into an ETF

Crypto asset manager Grayscale is in the process of converting its Grayscale Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF)

Grayscale is reportedly planning to convert its Grayscale Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF).

The move would provide investors with a diversified portfolio of major digital assets, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP and Avalanche (AVAX).

Grayscale's Digital Large Cap Fund currently has about $524 million in assets under management, with a heavy focus on Bitcoin and Ethereum.

Around 75% of the fund is allocated to Bitcoin, while Ethereum comprises roughly 19%, with the remaining investments distributed among Solana, XRP, and Avalanche.

The diversified approach is said to offer a balanced entry point for investors seeking broader exposure to the cryptocurrency market.

The New York Stock Exchange had filed a 19b-4 application on behalf of Grayscale, seeking the Securities and Exchange Commission’s (SEC) approval to amend its rulebook to permit the listing of this new ETF.

The filing comes after a pivotal year for the market, which recently saw the approval of spot ETFs for Bitcoin and Ethereum in January and July, respectively.

These funds are permitted to hold actual tokens rather than relying on futures contracts.

The shift follows years of rejections of such index funds, which were prompted by a court ruling in favor of Grayscale that led the SEC to reconsider its stance.

Grayscale has launched four ETFs this year, including the Grayscale Bitcoin ETF (NYSE:BTC), Grayscale Ethereum ETF (NYSE:ETH), Grayscale Litecoin ETF (NYSE:LTC), and Grayscale Chainlink ETF (NYSE:LINK).

The firm's strategy involves expanding its product offerings in response to increasing demand for diverse digital asset exposure.

According to ETF expert Eric Balchunas, the ETF's holdings, which are mainly Bitcoin and Ethereum, could offer sufficient flexibility to accommodate smaller, less liquid assets, potentially paving the way for approval.

Over the year, Grayscale's Bitcoin and Ethereum funds have seen significant outflows, with around $20 billion and $3 billion withdrawn, respectively.

In response, the firm has introduced lower-fee versions of these funds, which have attracted over $700 million in inflows.

Approvals for these ETFs have contributed to a surge in BTC and ETH prices, indicating a renewed investor confidence in the cryptocurrency market.

Other asset managers are also positioning themselves to launch ETFs that include smaller tokens such as Solana, XRP and Litecoin, with recent filings from Canary Capital and Bitwise Invest highlighting a broader trend.

The move comes amid increasing scrutiny from regulators in the U.S., with the SEC yet to approve any spot ETFs for cryptocurrencies, despite several applications.

At the time of writing, BTC is trading at $67,750, up a substantial 11% on a weekly basis.