Grayscale Seeks SEC Approval to Convert Digital Large Cap Fund into ETF Including XRP

Grayscale Investments, a prominent fund manager, has submitted a filing to the US Securities and Exchange Commission (SEC) seeking approval to convert its Digital Large Cap Fund into an exchange-traded fund (ETF). This move aims to merge digital assets with traditional finance, providing investors with easier access to the cryptocurrency market. The filing, an S-3 form, was submitted on April 1, 2025, and includes XRP among the digital assets to be featured in the ETF. This development comes as multiple high-profile asset managers have also filed proposals for spot ETFs with the SEC. The inclusion of XRP in Grayscale's ETF filing is significant, as the SEC acknowledged Grayscale's application for a spot XRP fund on February 13. This acknowledgment has sparked discussions about the potential impact on the cryptocurrency market, with some analysts suggesting that an XRP ETF approval could lead to a surge in the digital asset's value. However, it remains to be seen whether this approval will come in time to significantly benefit XRP, which has lost substantial value since the SEC dropped its case against Ripple. The conversion of Grayscale's Digital Large Cap Fund into an ETF represents a strategic effort to bridge the gap between digital assets and traditional finance, potentially attracting a broader range of investors to the cryptocurrency market.

This decision came after the company did the same operation with its Bitcoin and Ethereum Trusts and they are now trading as spot BTC and spot ETH ETFs – since the start of 2024. The Digital Large Crypto Fund is comprised of five top cryptocurrencies – Bitcoin, Ethereum, XRP, Solana, and Cardano’s ADA. According to the fund’s page on the Grayscale website, Bitcoin holds the largest position there – 79.40%. It is followed by Ethereum (10.69%). XRP holds the third position here with 5.85%, followed by SOL (2.92%) and ADA (1.14%).

This move by Grayscale is part of a broader trend in the financial industry, where traditional asset managers are increasingly looking to incorporate digital assets into their investment products. The inclusion of XRP in the ETF is particularly noteworthy, given the ongoing legal battles between the SEC and Ripple, the company behind XRP. The SEC's acknowledgment of Grayscale's application for a spot XRP fund suggests that the regulator may be softening its stance on the digital currency, which could have significant implications for the broader cryptocurrency market. However, it is important to note that the SEC has not yet approved any spot ETFs, and it remains to be seen whether Grayscale's application will be successful. If approved, the ETF would provide investors with a new way to gain exposure to XRP, potentially driving up demand for the digital currency. However, the approval process is likely to be lengthy and uncertain, and there is no guarantee that the ETF will be approved in time to benefit XRP, which has lost substantial value in recent months.