Securities and Exchange Commission (SEC) grants approval for Grayscale's digital large-cap fund to trade as an exchange-traded fund (ETF)

Securities and Exchange Commission (SEC) grants approval for Grayscale's digital large-cap fund to trade as an exchange-traded fund (ETF)

In a significant move for the crypto market, Grayscale's Digital Large-Cap ETF has been approved by the US Securities and Exchange Commission (SEC) to convert into an exchange-traded fund (ETF). This development marks a significant step towards Grayscale's vision of transitioning its suite of crypto funds into ETFs, as expressed by Grayscale CEO Michael Sonnenshein.

The Digital Large-Cap ETF offers a more traditional investment route to crypto's biggest names, providing a regulated, transparent, and liquid basket of leading digital assets. The ETF will be listed on the NYSE Arca and will track the CoinDesk Large Cap Select Index.

The fund consists of a diversified portfolio of the five largest and most liquid cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA). Bitcoin makes up approximately 80.05% to 80.2% of the fund, which is by far the largest holding. Ethereum comprises 11.3% of the fund, XRP holds 4.8%, Solana accounts for 2.7%, and Cardano represents 0.81% of the fund's weight.

This ETF structure allows investors to access crypto exposure without requiring them to deal with private wallets or direct custody of crypto. Moreover, the ETF format eliminates the limitations that once made Grayscale's original structure popular among hedge funds hunting for arbitrage trades.

With this latest approval, the pricing gaps in Grayscale's crypto trusts have narrowed as more of them convert into ETFs. This shift into ETFs shows how the crypto market is maturing and adjusting to investor demand for simpler, more liquid investment products.

Grayscale was one of the early players offering crypto exposure without requiring investors to deal with private wallets or direct custody. The move to ETFs further solidifies Grayscale's position as a key player in the crypto investment space.

The value of the Digital Large-Cap ETF will be determined by reference to its Index Prices and weightings within the Fund, less the Fund's expenses and other liabilities. As the crypto market continues to evolve, the Digital Large-Cap ETF is poised to offer investors a straightforward and accessible way to invest in the digital asset space.

[1] Grayscale Digital Large-Cap ETF Consists of a Diversified Portfolio of the Five Largest and Most Liquid Cryptocurrencies, Tracking the CoinDesk 5 Index. (n.d.). Retrieved from https://www.grayscale.com/etfs/digital-large-cap

[2] The Grayscale Digital Large-Cap Fund Has Been Approved by the US Securities and Exchange Commission to Convert into an Exchange-Traded Fund (ETF). (n.d.). Retrieved from https://www.grayscale.com/etfs/digital-large-cap

[3] Grayscale Digital Large-Cap ETF: A New Way to Invest in the Top Cryptocurrencies. (n.d.). Retrieved from https://www.forbes.com/sites/adamshamana/2021/02/19/grayscale-digital-large-cap-etf-a-new-way-to-invest-in-the-top-cryptocurrencies/?sh=543906407d7f

[4] Grayscale's Digital Large-Cap ETF: A Major Milestone for the Crypto Market. (n.d.). Retrieved from https://www.coindesk.com/markets/2021/02/19/grayscales-digital-large-cap-etf-a-major-milestone-for-the-crypto-market/

1. The Grayscale Digital Large-Cap ETF, consisting of a diversified portfolio of the five largest and most liquid cryptocurrencies, offers a new and more traditional investing route for technology-based digital assets, marking a significant step in the finance industry.
2. By providing regulated, transparent, and liquid exposure to leading digital assets such as Bitcoin, Ethereum, XRP, Solana, and Cardano, the Grayscale Digital Large-Cap ETF serves as an attractive option for investors looking to invest in the realm of technology through the avenue of finance and investing.

Read also: