SEC Greenlights Grayscale to Convert Digital Large-Cap Fund into Spot Crypto ETF

Highlights:

• SEC allows Grayscale to turn its crypto fund into an ETF on NYSE Arca.
• Fund holds top five cryptos with Bitcoin leading and rebalances every quarter.
• This step could clear the path for future ETFs focused on assets like SOL, ADA, and XRP.

On July 1, the U.S. Securities and Exchange Commission (SEC) officially approved the conversion of the Grayscale Digital Large Cap Fund into a spot exchange-traded fund (ETF). This fund holds the top five cryptocurrencies by market value, as tracked by the CoinDesk Five Index. Bitcoin (BTC) dominates the fund with about 80.2% of the total weight, followed by Ether (ETH) at 11.3%. Solana (SOL) makes up around 2.7%, XRP holds over 4.8%, and Cardano’s ADA (ADA) has a 0.81% share in the fund. The fund’s makeup is based on market value and is adjusted every quarter to reflect changes in asset size and liquidity.

NEW: There's the approval order for @Grayscale's $GDLC to convert into an ETF. This is their Digital Large cap fund that holds Bitcoin, Ethereum, Solana, XRP, and Cardano. Final deadline was tomorrow https://t.co/jSt1HBWD3E pic.twitter.com/9kALeDD2Uh

— James Seyffart (@JSeyff) July 1, 2025

As of June 30, Grayscale reported non-GAAP assets under management of approximately $775 million for the fund. Originally launched in 2018, the fund has been trading under the ticker GDLC on OTC Markets since 2019. With SEC approval, it will now transition to NYSE Arca’s ETF list.

Tuesday’s letter read:

“The investment objective of the Fund is for the value of the shares to reflect the value of the digital assets held by the Fund, ‘Fund Components’ as determined by reference to their respective Index Prices and weightings within the Fund, less the Fund’s expenses and other liabilities.”

Grayscale ETF Approval Could Pave Way for More Altcoin Funds

Grayscale was among the first to offer easy crypto investing without holding coins directly. Turning its trusts into ETFs shows the crypto market is growing and becoming more mature. The SEC is looking at more crypto ETF proposals, including ones for SOL and DOGE, as rules have become more crypto-friendly since Donald Trump took office in January. ETF Store President Nate Geraci said on Sunday that Grayscale’s approval might open the door for spot ETFs for XRP, SOL, ADA, and more. 

Geraci said on X that approving GDLC helps the SEC test other crypto assets in ETFs. XRP, SOL, and ADA make up less than 10% of the fund, so it’s a simple way to slowly move into more crypto.

SEC approves Grayscale Digital Large Cap ETF today…

xrp, sol, & ada will now be available in ‘33 Act ETF wrapper.

SEC also provided addn’l clarity on disclosures & registrations of crypto ETFs.

See where this is all heading?

Individual spot xrp, sol, ada, etc ETFs up next.

— Nate Geraci (@NateGeraci) July 2, 2025

SEC Eyes Rule Change to Speed Up Crypto ETF Approvals

At the same time, the SEC is considering a potential change that could let crypto ETFs launch without submitting a 19b-4 filing. Instead, issuers would submit a Form S-1 to the SEC and wait 75 days. If the SEC raises no concerns during that period, the ETF could proceed to market.

Experts are now closely watching to see which tokens might meet the criteria for this quicker path. Right now, the 9b-4 filing involves a long approval procedure for new exchange-traded products. If the SEC adopts this change, it could speed up the approval process, making it easier and faster for fund managers to launch new crypto ETFs.

🚨SCOOP: The @SECGov is in the early stages of creating a generic listing standard for token-based ETFs in coordination with exchanges.

The thinking, I’m told, is that if a token meets the criteria, issuers could skip the 19b-4 process, file an S-1, wait 75 days, and the…

— Eleanor Terrett (@EleanorTerrett) July 1, 2025