Crypto ETF Filings Surge Ahead of SEC Decision on Grayscale Fund

Crypto ETF filings have surged in recent weeks as the U.S. Securities and Exchange Commission (SEC) approaches a critical decision on the conversion of the Grayscale Digital Large Cap Fund (GDLC) to an ETF. This development comes as various issuers have submitted proposals for new crypto ETFs, including those focused on specific cryptocurrencies and broader crypto indexes.

Yorkville America Digital recently proposed a Truth Social-branded ETF that would hold both Bitcoin (BTC) and Ethereum (ETH). This follows a partnership finalized in April with Truth Social's parent company, Trump Media and Technology Group, which had previously indicated plans to launch a Bitcoin ETF. Meanwhile, CoinShares has entered the spot Solana ETF race, becoming the eighth issuer to do so. These filings follow the SEC's engagement with issuers about spot SOL products and subsequent S-1 amendments.

A source familiar with the amendments noted that while the exact timeline for an SEC ruling on Solana products remains uncertain, the flurry of filings suggests that these products are close to approval. The latest S-1 amendments, which include staking language, indicate a push from the SEC to organize the proposals. This development is seen as a positive sign for the approval of broader crypto index ETF proposals, as BTC, ETH, and SOL combined constitute more than 90% of the Nasdaq Crypto Index.

The SEC is expected to decide by July 2 whether to allow the GDLC to convert to an ETF. Analysts expect the agency to approve the conversion of GDLC and the Bitwise 10 Crypto Index Fund (BITW) into ETFs, citing the small allocations to alternative coins as a potential factor in their favor. Samir Kerbage, CIO of Brazil-based asset manager Hashdex, views the Solana ETF S-1 amendments as a positive development toward approving broader crypto index ETF proposals.

Some industry experts believe that the SEC's approval of crypto index ETFs could pave the way for the approval of single-asset spot products. Van Buren Capital general partner Scott Johnsson noted that because index products have a more undefined universe of allocations, the SEC would theoretically adopt a general rule rather than a case-by-case rule application. Once the index products are cleared, it should be a simple application of the general rule to the single-asset spot products, according to Johnsson.

As the July 2 deadline approaches, the crypto industry is closely watching the SEC's decision on the GDLC conversion and the potential impact on the broader crypto ETF landscape. The approval of crypto index ETFs could open the floodgates for a wider range of crypto investment products, providing investors with more options and potentially driving further adoption of digital assets.