The Securities and Exchange Commission has approved Grayscale Investments’ application to convert its Digital Large Cap Fund (GDLC) into a publicly traded exchange-traded fund, marking a significant milestone for cryptocurrency investment accessibility. The ETF will provide investors with exposure to five major digital assets, with itcoin">Bitcoin comprising over 80% of the fund’s holdings, followed by Ethereum at approximately 11%, XRP at 4.8%, Solana at 2.8%, and Cardano at 0.8%. This approval came just one day before the SEC’s decision deadline, representing a notably swift regulatory response compared to the agency’s historically cautious approach toward cryptocurrency investment products.
The fund is structured around the CoinDesk 5 Index, which tracks the performance of the five largest and most liquid digital assets in the cryptocurrency market. This strategic composition allows investors to gain diversified exposure to major cryptocurrencies through a single regulated investment vehicle trading on NYSE Arca. The conversion from a closed-end fund structure eliminates the premium and discount trading issues that previously affected investor returns, providing more accurate pricing that reflects the underlying asset values. Bloomberg ETF analyst James Seyffart noted that the approval was anticipated given itcoin">Bitcoin and Ethereum’s dominant 90% allocation within the fund.
The regulatory approval signals a potential shift in the SEC’s stance toward multi-asset cryptocurrency funds, particularly those heavily weighted toward established digital currencies like itcoin">Bitcoin and Ethereum. Industry analysts predict this could trigger a wave of similar ETF approvals in the second half of 2025, with asset managers preparing offerings that include other popular cryptocurrencies such as Dogecoin, Avalanche, Litecoin, and Sui. However, the SEC has yet to approve ETFs focused solely on smaller altcoins, suggesting regulators prefer diversified funds with substantial allocations to proven cryptocurrencies.
This approval represents the culmination of Grayscale’s legal battle with the SEC, which began when the company sued the regulator in 2023 over repeated denials to convert its funds into traditional ETFs. The appellate court’s victory, which criticized the SEC’s reasoning for rejections, helped pave the way for broader cryptocurrency ETF acceptance and contributed to last year’s approval of spot itcoin">Bitcoin ETFs. The GDLC conversion joins Grayscale’s previously approved itcoin">Bitcoin and Ethereum ETFs, expanding the company’s suite of regulated cryptocurrency investment products available to mainstream investors.