Regulators Nod as Crypto Fund Inches Toward ETF Status

The U.S. Securities and Exchange Commission (SEC) has signaled potential approval for Grayscale Investments’ Grayscale Digital Large Cap Fund (GDLC) to transition from a private trust into a publicly traded exchange-traded fund (ETF). This development, if finalized, would mark a significant shift in the structure of one of the largest crypto investment vehicles in the United States. The fund currently holds substantial exposure to Bitcoin (BTC), Ethereum (ETH), and a basket of major altcoins, making it a key player in the institutional crypto space.

The proposed structure change would allow the GDLC to offer investors a more conventional method of accessing a diversified portfolio of major cryptocurrencies, without requiring direct ownership or custody of digital assets. The fund currently operates under the 1940 Investment Company Act as a private trust, but the new ETF structure is expected to comply with more traditional fund regulations, potentially improving liquidity and transparency for investors.

The transition would also likely result in a rebranding of the fund to align with standard ETF nomenclature. Grayscale has not yet disclosed a final ticker symbol for the new product, but industry analysts speculate it could reflect a multi-crypto ETF rather than a Bitcoin-specific offering. This aligns with the growing demand for diversified exposure to the crypto market, particularly among institutional and accredited investors.

The SEC has not yet issued a formal approval but has acknowledged the completeness of Grayscale’s 19b-4 filing, indicating the agency is actively reviewing the application. If approved, the GDLC would be the first multi-asset crypto ETF to launch in the U.S., following repeated rejections of Bitcoin-only ETF proposals. The fund’s current holdings suggest that the new ETF would include exposure to top altcoins such as Binance Coin (BNB), Cardano (ADA), and Solana (SOL), in addition to BTC and ETH.

Industry observers note that the approval could have broader implications for the regulatory landscape surrounding crypto assets. The SEC’s treatment of the GDLC as a traditional ETF, rather than a commodity or investment trust, may signal a more accommodating regulatory stance. However, the agency’s previous rejection of Bitcoin ETFs suggests that the new product must clearly differentiate itself in terms of structure and compliance.

Grayscale Investments. [https://www.grayscaleinvestments.com]