Grayscale Pushes for Altcoin ETF Expansion Amid SEC's Evolving Crypto Framework

Grayscale, a leading crypto asset manager, has submitted filings with the U.S. Securities and Exchange Commission (SEC) for three new exchange-traded funds (ETFs): the Grayscale Hedera ETF (HBAR), as well as S-3 filings for the Grayscale Litecoin (LTC) and Bitcoin Cash (BCH) ETFs. These moves represent the latest in a series of strategic efforts by the firm to expand its regulated crypto investment offerings and bring additional altcoins into the public market. On September 9, 2025, the company filed an S-1 registration for the Hedera ETF, the first attempt to list a fund tracking the HBAR token, which is native to the Hedera distributed ledger platform. The SEC must still approve the filing, and the application is subject to potential amendments.

The filings for Litecoin and Bitcoin Cash are structured as S-3 registration statements, a process Grayscale has previously used to convert its Bitcoin and Ethereum trusts into ETFs in 2024. The Litecoin and Bitcoin Cash ETFs aim to transform existing closed-end trusts into open-ended products listed on NYSE Arca. If approved, these products will allow investors to access regulated exposure to the respective cryptocurrencies with greater liquidity and pricing efficiency. The Grayscale Bitcoin Cash Trust, for instance, reported over $202 million in net assets as of June 30, 2025. The conversion from closed-end trust to ETF is expected to reduce the price discrepancy between market price and net asset value, a common issue in closed-end structures.

The timing of the filings aligns with heightened activity in the crypto ETF space, as multiple asset managers seek to introduce products for altcoins such as Dogecoin, Solana, and XRP. The SEC has yet to finalize decisions on several pending applications, including Grayscale’s spot Hedera ETF and Bitwise’s Dogecoin ETF, with recent delays underscoring the regulatory complexities involved. Grayscale’s prior legal action against the SEC was instrumental in securing approval for its Bitcoin and Ethereum ETFs, which together have generated over $1.2 trillion in trading volume since their January 2024 launch. The firm’s recent filings signal confidence in the SEC’s evolving regulatory framework and the increasing demand for diversified crypto exposure.

A key component of Grayscale’s strategy is leveraging the Generic Listing Standards introduced by the SEC, which facilitate streamlined approvals for ETFs that meet certain criteria. The company’s Litecoin ETF filing explicitly states that it is contingent upon the SEC’s adoption of these standards or the approval of a 19b-4 filing for listing on NYSE Arca. This approach reduces regulatory uncertainty and accelerates the path to market for these products. Additionally, the involvement of major financial institutions such as the Bank of New York Mellon (administrator) and Coinbase (custody and prime brokerage) further enhances the credibility and operational stability of the proposed ETFs.

The Grayscale Hedera, Litecoin, and Bitcoin Cash ETFs could represent significant milestones in the maturation of the crypto asset class. These products not only diversify the firm’s existing lineup but also cater to a growing investor base seeking regulated access to a broader range of digital assets. The success of the Bitcoin and Ethereum conversions has demonstrated the market’s appetite for institutional-grade crypto products, and Grayscale appears well-positioned to capitalize on this momentum. If approved, the new ETFs could also encourage further innovation and competition in the crypto investment space, potentially prompting other asset managers to pursue similar offerings.