Grayscale ETF Brings Crypto Diversification to Wall Street
The U.S. Securities and Exchange Commission (SEC) has approved the conversion of Grayscale Investments’ Digital Large Cap Fund (GDLC) into a spot cryptocurrency exchange-traded fund (ETF), making it the first multi-crypto basket ETF in the United States.
The fund, which holds Bitcoin, Ethereum, XRP, Solana, and Cardano, will trade on NYSE Arca following the announcement on July 1, 2025.
The approval is in line with the increased regulatory support for digital assets, though concerns about market stability and investor protection remain.
SEC Approves Grayscale’s Multi-Crypto ETF
The SEC’s accelerated approval allows Grayscale’s Digital Large Cap Fund, listed on OTC Markets under the ticker GDLC since 2019, to transition into a spot ETF on NYSE Arca. The fund, tracking the CoinDesk 5 Index (CD5), held approximately $775 million in assets under management (AUM) as of June 30, 2025.
The portfolio comprises approximately 80% Bitcoin, 11% Ethereum, 4.8% XRP, 2.8% Solana, and 0.8% Cardano, fluctuating slightly in previous months due to periodic rebalancing. The approval amends NYSE Arca Rule 8.500-E and meets Section 6(b)(5) of the Securities Exchange Act of 1934, on measures to prevent fraud and market manipulation.
The decision follows Grayscale’s 2023 legal victory against the SEC, when the United States Court of Appeals for the District of Columbia ruled the agency’s denial of a Bitcoin ETF as arbitrary, leading to spot Bitcoin ETF approvals in January 2024 and Ethereum ETFs in July 2024. The GDLC conversion sets a precedent for altcoins, perhaps leading the way for other multi-asset crypto funds.
David LaValle, Grayscale’s head of ETFs, described the approval as a “milestone for diversified crypto exposure.â€
Meanwhile, Bloomberg analyst James Seyffart predicted a 90% approval probability for similar filings, citing favorable regulatory conditions. The decision aligns with a more crypto-friendly regulatory stance under the new United States administration, though legal precedents and market demand also play major roles.
The Impact of Grayscale’s Converted Fund
The GDLC ETF provides institutional and retail investors with intraday trading, lower costs compared to OTC products, and integration with standard brokerage accounts. These features, building on the success of spot Bitcoin and Ethereum ETFs, are expected to attract a wider investor base.
The fund’s diversified portfolio, with 91% allocated to Bitcoin and Ethereum, intends to reduce exposure to individual asset volatility while offering regulated access to cryptocurrencies.
Regulatory oversight remains, especially regarding XRP, Solana, and Cardano, which have faced SEC regulatory actions. The fund’s 8.1% allocation to these assets likely lowered the agency’s regulatory concerns, according to Nate Geraci of ETF Store.Â
The SEC is reviewing single-asset products for XRP, Solana, and Cardano as well, with decisions expected by October 2025, possibly setting a precedent for crypto investment vehicles in the future. The approval may also have global impacts, as United States regulatory decisions often influence other jurisdictions.Â
Planned single-asset ETFs for assets like Litecoin, Dogecoin, and Polkadot prove the growing market demand, though regulatory challenges remain. The launch of the product is expected to raise institutional interest, since it is set in a regulated framework and has exposure that is diversified.
What’s Next?
As the first multi-crypto basket ETF in the United States, the GDLC fund could pave the way for other funds such as Bitwise’s 10 Crypto Index Fund, which awaits an SEC decision as of July 2, 2025.Â
The approval is also in line with the global trend of integrating digital assets into traditional finance, driven by legal rulings, investor interest, and fast-changing regulations. However, the SEC’s focus on custody risks and surveillance controls is a testament to its continued concerns.
The ETF offers investors a regulated vehicle to access cryptocurrencies, balancing diversification with exposure to major assets. Still, market complexity and regulatory uncertainties require caution.
