SEC Approves Grayscale Multi-Crypto ETF for Trading

The SEC’s approval of Grayscale’s Digital Large Cap Fund (GDLC) for listing and trading on the New York Stock Exchange represents a significant breakthrough for cryptocurrency investment vehicles. Unlike the spot Bitcoin and Ethereum ETFs that debuted in 2023, GDLC is modeled on an index tracking the five largest and most liquid digital assets, providing investors with diversified exposure to the crypto market in a single product. According to Grayscale’s website, Bitcoin dominates the fund’s weighting at 72%, followed by Ethereum at 17%, while XRP, Solana, and Cardano account for 5.6%, 4%, and 1% respectively.

Grayscale CEO Peter Mintzberg celebrated the approval on social media, stating that the team is working “expeditiously to bring the FIRST multi-crypto asset ETP to market” and thanking the SEC for its “unmatched efforts in bringing the regulatory clarity our industry deserves.” The fund is expected to begin trading on Friday, according to a person familiar with the matter, providing institutional and retail investors with unprecedented access to a basket of major cryptocurrencies through traditional brokerage accounts.

The approval marks a dramatic reversal from just over a year ago when the SEC and Grayscale were locked in legal combat. After the regulator rejected several applications to convert Grayscale’s flagship Bitcoin fund into an ETF, the firm sued the SEC and emerged victorious in court during the Biden administration. That decision ultimately led to the approval of spot Bitcoin ETFs in the U.S. and established critical legal precedent for crypto investment products.

ETF Institute co-founder Nate Geraci noted on social media that Grayscale “fought for the industry” and should be “applauded for laying groundwork here.” The SEC’s simultaneous approval of generic listing standards for commodity-based products mirrors what Geraci described as the “crux of Grayscale’s lawsuit”—requiring that an asset have futures contracts trading on a U.S. venue that monitors for fraud and market manipulation.

This regulatory framework addresses the SEC’s previous concerns about market surveillance. Grayscale’s lawsuit had argued that the SEC acted in an “arbitrary and capricious” manner by approving futures-based Bitcoin ETFs while rejecting spot Bitcoin ETF proposals, despite similarities between the products including surveillance sharing agreements.

The approval signals a potentially expansive future for crypto ETFs. Bloomberg ETF Analyst Eric Balchunas noted on social media that Coinbase’s derivatives arm offers futures contracts for 12 cryptocurrencies beyond Bitcoin and Ethereum, including XRP, Solana, and Dogecoin, which could serve as the basis for future ETF approvals under the new commodity-based standards.

Separately, Dogecoin and XRP ETFs from Rex Shares and Osprey funds began trading on Thursday, though these products are registered under the Investment Company Act of 1940—a distinct regulatory framework from the process most asset managers have sought for crypto-focused products. This dual-track approval system suggests the SEC is developing multiple pathways for crypto investment vehicles.

Kristin Smith, president of Solana Policy Institute, told Decrypt that ETFs tracking multiple cryptocurrencies represent a “natural evolution” that provides investors with more options. “The introduction of diversified crypto ETPs that hold multiple digital assets, including Solana, is the next logical step in the journey to ensure Americans can invest in crypto,” she said.

For former Grayscale employees like Jennifer Rosenthal, now chief communications officer at DeFi Education Fund, the SEC’s latest moves demonstrate how dramatically the regulatory environment has evolved. “It is crazy exciting how far we have come since the lawsuit and subsequent victory,” Rosenthal told Decrypt, emphasizing that “this has always been a conversation about investor choice.” The approval of GDLC not only validates Grayscale’s legal strategy but potentially opens the door for a new generation of diversified cryptocurrency investment products.