- Grayscale files for Digital Large Cap Fund ETF with SEC.
- The fund includes Bitcoin, Ether, Solana, Cardano, and XRP cryptocurrencies.
- SEC approval could signal broader adoption of diversified crypto ETFs.
Grayscale recently agreed to file a major regulators submission with the U.S. Securities and Exchange Commission (SEC) to approve its Grayscale Digital Large Cap Fund as an exchange-traded fund (ETF) on April 1. The filing submission is an essential step for Grayscale as it aims to expand on some of its product offerings and further its footprint in the digital asset space.
The Fund’s Composition and Purpose
Grayscale’s Digital Large Cap Fund houses a well-rounded portfolio of major cryptocurrencies. This fund includes primarily digital assets other than stocks or bonds, such as Bitcoin (BTC), Ether (ETH), Solana (SOL), Cardano (ADA), and XRP. As of April 1, the fund has raised over $600 million in assets under management. The fund is only open to accredited investors and those with much money.
This filing seeks to change the structure of the existing fund to an ETF, thus allowing it to be traded on a public exchange. This would be an easier and more regulated way for investors to get exposure to various popular performing cryptocurrencies.
To transition from a private fund to open its doors to the public, Grayscale filed an S-3 registration statement with the SEC. This filing is vital in getting Grayscale the green light to list its fund in a public exchange, such as the New York Stock Exchange (NYSE) Arca. This comes after NYSE Arca requested approval of the Grayscale index fund listing in October 2024.
In its precedent S-3 filing, the fund plans to provide exposure to a wide range of cryptocurrencies, allowing it to stand apart from the more traditional Bitcoin, Ether-focused funds in the market today. Grayscale has received approval from the SEC to list its Digital Large Cap Fund ETF, which, if approved, will allow investors to trade shares of the fund like any other ETF. This will give them an easy, regulated way to enter an array of digital assets without holding each cryptocurrency.
A Sign of Broader Trends in Crypto ETFs
That filing is one of several cryptocurrency-related ETF filings that have been popping up across the spectrum of altcoins. Throughout recent months, the SEC has given the OK to several ETFs linked to Bitcoin and Ether, the two largest cryptocurrencies by market cap. While its filing is vital because it attempts to move XRP and other altcoins into the mix, there will be an alternative to the present limited offerings.
Grayscale’s action is consistent with the evolving US regulatory environment. The SEC has shown a willingness to grant authorization for cryptocurrency-based financial products, particularly under the direction of the Trump administration, which has promoted more precise and less restrictive regulation of digital assets. In December 2024, the SEC approved the first batch of mixed crypto index ETFs by financial giants like Hashdex and Fidelity. But so far, these funds have been Bitcoin and Ether, with no altcoin such as Solana or XRP.
There has been an uptick in crypto-focused funds, including altcoin support like Solana, XRP, and Cardano. And it’s simply going to get stronger with the SEC continuing to make their review of cryptocurrency ETFs. These are seen as more efficient vehicles for investors, providing exposure to the crypto market, like traditional index ETFs like the S&P 500, which give exposure to a basket of stocks.
Most notably, XRP was included in the fund’s portfolio as one of the investible coins. Native cryptocurrency XRP certainly had its fair share of legal problems in the U.S., as Ripple was fighting in court against the SEC because its token is not a security. While there is still this ongoing legal battle, the inclusion of XRP in Grayscale’s Digital Large Cap Fund ETF, which also has Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Bitcoin SV (BSV), Stellar (XLM) and Litecoin (LTC) is a sign of its legitimacy next to the other major cryptocurrencies.
