Grayscale’s Crypto ETF Wins SEC Approval: A Game-Changer for Digital Assets

The crypto world just got a major boost! On July 1, 2025, the U.S. Securities and Exchange Commission (SEC) greenlit the conversion of Grayscale’s Digital Large Cap Fund (GDLC) into a spot exchange-traded fund (ETF). 

This landmark move marks the first multi-asset crypto ETF in the U.S., offering investors a simple way to dive into top cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). Let’s break down what this means for investors and the future of crypto in traditional finance.

Want to trade crypto while reading our latest news? Head over to Bitrue and explore your options today!

Why This ETF Approval Matters

Grayscale’s Digital Large Cap Fund, launched in 2018 and traded on OTC Markets under the ticker GDLC since 2019, is now set to trade on NYSE Arca as a full-fledged ETF. This shift from a closed-end fund to an ETF structure is a big deal. 

It makes investing in crypto easier, more transparent, and more accessible for both retail and institutional investors. Unlike direct crypto purchases, which can be tricky due to security and regulatory concerns, this ETF offers a regulated way to gain exposure to a diversified crypto portfolio.

What’s Inside the ETF?

The Grayscale ETF tracks the CoinDesk 5 Index, which includes the five largest cryptocurrencies by market cap. As of the SEC’s approval, the fund’s portfolio is weighted as follows:

• Bitcoin (BTC): ~80%

• Ethereum (ETH): ~11%

• XRP: ~4.8%

• Solana (SOL): ~2.8%

• Cardano (ADA): ~0.8%

With roughly $775 million in assets under management (AUM) as of June 30, 2025, the fund offers a balanced mix of established and emerging digital assets. 

This diversification reduces risk while giving investors exposure to the crypto market’s biggest players.

Read Also: Grayscale Thinks Bitcoin Will be the Same as Gold!

The Road to SEC Approval

Grayscale has been a pioneer in crypto investment products, and this approval is a testament to its persistence. The firm filed an amended S-3 form to convert the GDLC into a spot ETF, which the SEC acknowledged just a day before the July 2 deadline. 

This wasn’t Grayscale’s first rodeo, its earlier legal battles with the SEC, including a 2023 courtroom victory, helped pave the way for spot Bitcoin ETFs and set the stage for this multi-asset approval.

Regulatory Milestones

The SEC’s decision reflects a growing acceptance of cryptocurrencies in mainstream finance. The agency ensured the fund meets strict standards under Section 6(b)(5) of the Securities Exchange Act to prevent fraud and manipulation. 

This approval also comes with updated NYSE Arca rules, allowing ETFs to be structured as limited liability companies and based on index-tracked portfolios, making it easier for similar funds to launch in the future.

What This Means for Investors

The ETF structure simplifies crypto investing. Instead of navigating wallets or exchanges, investors can buy shares through traditional brokerage accounts. This is a game-changer for those hesitant about direct crypto ownership due to security risks or regulatory uncertainty. 

The ETF’s listing on NYSE Arca also boosts liquidity and transparency, making it a more attractive option for both retail and institutional players.

Attracting Institutional Capital

The approval is expected to unlock significant institutional investment. With Bitcoin and Ethereum dominating the fund’s allocation (around 90%), it’s a safe bet for large funds, family offices, and corporations looking to dip their toes into crypto without the hassle of managing individual assets. 

Industry experts, like CoinDesk Indices’ Andy Baehr, call this the “largest multi-token digital asset ETF in the world,” signaling its potential to drive mainstream adoption.

Read Also: Grayscale's Research Findings: Why Stagflation Might be Good for Bitcoin

Implications for the Crypto Market

This approval could open the door for single-asset spot ETFs for altcoins like XRP, Solana, and Cardano. While these assets make up smaller portions of the GDLC ETF, their inclusion signals the SEC’s willingness to consider altcoins in regulated products. 

Other firms, like Bitwise and Franklin Templeton, are already filing to convert or launch their own crypto index ETFs, hinting at a wave of approvals in the second half of 2025.

Streamlined Regulatory Process

The SEC is reportedly developing simpler criteria for crypto ETF listings, potentially bypassing the lengthy 19b-4 filing process. A new 75-day S-1 filing timeline could speed up launches, making it easier for issuers to bring crypto funds to market. 

This shift could boost liquidity and innovation in the crypto ETF space, further legitimizing digital assets as an investable class.

Challenges and Market Reactions

Interestingly, all five cryptocurrencies in the ETF saw price drops after the announcement. Bitcoin fell 1%, Ethereum 2.2%, XRP 0.55%, Solana 5.7%, and Cardano 4.4%.

This could reflect short-term market adjustments or profit-taking, but it doesn’t diminish the long-term bullish outlook for crypto ETFs. Investors remain optimistic about increased adoption and inflows.

High Fees and Competition

One potential downside is the fund’s expense ratio. Grayscale’s Bitcoin ETF, for example, has a 1.5% fee, making it one of the pricier options. 

The GDLC ETF’s 2.5% expense ratio could deter some investors compared to direct crypto ownership or competing ETFs. Still, the convenience and regulatory oversight may outweigh the costs for many.

Read Also: Grayscale Launches SUI Trust: A Milestone for SUI’s Institutional Growth

Conclusion

The SEC’s approval of Grayscale’s Digital Large Cap Fund as a spot ETF is a pivotal moment for the crypto industry. 

By offering diversified exposure to Bitcoin, Ethereum, XRP, Solana, and Cardano, this ETF makes it easier for investors to tap into the digital asset market. 

With $775 million in AUM and a listing on NYSE Arca, it’s poised to attract significant capital and pave the way for more crypto ETFs. While challenges like high fees and short-term price dips exist, the long-term outlook is bright. 

FAQ

What exactly did the SEC approve for Grayscale?

The SEC approved Grayscale’s Digital Large Cap Fund (GDLC) to convert into a spot ETF, now tradable on NYSE Arca and backed by actual crypto assets.

What cryptos are included in the GDLC ETF?

The ETF includes BTC (~80%), ETH (~11%), XRP (~4.8%), SOL (~2.8%), and ADA (~0.8%), tracking the CoinDesk 5 Index.

How is this ETF different from buying crypto directly?

It offers secure, regulated exposure via brokerage accounts, no wallets, no exchanges, no direct custody needed.

Will this attract institutional investors?

Yes. With 90% in BTC and ETH, it’s designed to appeal to institutions wanting crypto access without managing individual coins.

Are there downsides to the GDLC ETF?

The main concern is its 2.5% expense ratio, higher than most, but some investors may trade cost for compliance and ease of access.

Bitrue Official Website: 

Website: https://www.bitrue.com/

Sign Up: https://www.bitrue.com/user/register

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.