SEC Nears Decision on Grayscale's Multi-Asset Crypto ETF, Holding Over $760 Million in Digital Assets

The U.S. Securities and Exchange Commission (SEC) has formally acknowledged an amended application from Grayscale Investments to convert its Digital Large Cap Fund (GDLC) into a spot exchange-traded fund (ETF), a move that could introduce the first U.S. spot ETF offering exposure to a basket of major cryptocurrencies. The GDLC currently holds Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), with Bitcoin and Ethereum comprising the significant majority of its assets. This acknowledgment initiates a critical review process, with a final decision anticipated by July 2, 2025.

The proposed conversion seeks to transform the Grayscale Digital Large Cap Fund, which currently manages nearly $762 million in assets, from a private investment vehicle into a publicly traded ETF. This transition would allow a broader range of investors, including retail and institutional participants, to gain regulated exposure to diversified digital assets through traditional brokerage accounts, circumventing the complexities of direct cryptocurrency ownership and storage. The fund also intends to rename itself the Grayscale CoinDesk Crypto 5 ETF upon approval.

This development follows Grayscale's successful conversion of its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF earlier this year, a landmark achievement that set a precedent for crypto-to-ETF transitions after a legal victory against the SEC. Market analysts, including Nate Geraci, President of The ETF Store, and Bloomberg ETF analysts James Seyffart and Eric Balchunas, express high optimism for the GDLC's approval, citing the relatively small combined weighting of altcoins (XRP, SOL, ADA) within the fund, which may alleviate some regulatory concerns.

If approved, the Grayscale Digital Large Cap ETF would mark a significant expansion of regulated crypto investment products in the U.S., moving beyond single-asset Bitcoin and Ethereum ETFs. The SEC's engagement with this multi-asset proposal suggests a potential softening of its stance towards broader crypto investment vehicles, aligning with growing pressure from the financial sector to integrate digital assets into mainstream investment channels. The outcome of this decision is keenly awaited by the cryptocurrency industry, as it could pave the way for more diversified and accessible crypto investment opportunities.