XRP News Today: Grayscale Digital Large Cap Fund Converts to ETF Tracking Top 5 Cryptocurrencies

The Securities and Exchange Commission (SEC) has approved the conversion of the Grayscale Digital Large Cap Fund into an exchange-traded fund (ETF). This move marks the transformation of the crypto index product into an ETF structure, allowing it to track a basket of the five largest cryptocurrencies by market capitalization: Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA).

The ETF will issue trust units that mirror the performance of these five cryptocurrencies. As of the approval, the portfolio weights were approximately 80% Bitcoin, 11% Ethereum, 4.8% XRP, 2.8% Solana, and 0.8% Cardano. Grayscale reports non-GAAP assets under management of roughly $775 million for the product as of June 30. The fund, which first launched in 2018 and has been trading on OTC Markets under the ticker GDLC since 2019, will now join NYSE Arca’s ETF roster. Once operational details are finalized, it will transition to continuous trading and on-exchange creation and redemption.

The accelerated order amends NYSE Arca Rule 8.500-E to permit Trust Units issued by limited-liability companies and to recognize index-based portfolios. The approval comes amid optimism driven by rumors that the first spot Solana ETF could start trading in the US as early as this week and expectations of a wave of approval for other crypto ETFs this summer. The Commission stated that the exchange’s surveillance capabilities and the fund’s asset-quality thresholds meet the requirements of Section 6(b)(5) to deter fraud and manipulation. Furthermore, the move opens the door for other crypto basket funds to be converted into ETFs.

Bitwise filed a Form 19b-4 in November to uplist its $1.3 billion Bitwise 10 Crypto Index Fund (BITW) as an exchange-traded product. Hashdex has also requested that the SEC broaden its Nasdaq Crypto Index US ETF to include seven additional altcoins, a step it says will precede a complete conversion of its diversified trust. Franklin Templeton likewise submitted paperwork in February to launch its own crypto index ETF, positioning the firm to shift existing basket assets into an exchange-traded format once approved.

This approval by the SEC is a significant development in the crypto industry, as it paves the way for more crypto index products to transition into ETFs. The move is expected to enhance liquidity and accessibility for investors interested in gaining exposure to a diversified basket of cryptocurrencies. The approval also underscores the SEC's growing acceptance of crypto assets, provided they meet stringent regulatory standards. The transition of the Grayscale Digital Large Cap Fund into an ETF structure is a milestone that could influence the broader adoption of crypto ETFs in the market.