Grayscale has received approval from the U.S. Securities and Exchange Commission (SEC) to convert its Digital Large-Cap Fund into an exchange-traded fund (ETF). The fund tracks the five largest cryptocurrencies by market capitalization, based on the CoinDesk Five Index, with Bitcoin (BTC) dominating the portfolio at 80.2%. Ethereum (ETH) follows at 11.3%, Solana (SOL) holds 2.7%, XRP makes up over 4.8%, and Cardano (ADA) accounts for 0.81%.
A crypto ETF allows investors to gain exposure to cryptocurrency price movements through traditional stock exchanges without directly owning the underlying digital assets. These ETFs may hold cryptocurrencies directly (spot ETFs) or track futures contracts or indexes, offering a safer and more accessible way for mainstream investors to participate in the crypto market without needing wallets or exchange accounts.
Grayscale’s move comes amid significant shifts in the regulatory environment. The SEC is reportedly considering a simplified listing process for crypto ETFs, potentially enabling issuers to bypass the lengthy 19b-4 application in favor of a faster S-1 filing. Analysts have raised the likelihood of approval for spot ETFs tied to coins like Solana, XRP, and Litecoin to as high as 95%, with decisions expected by October. Bloomberg experts also foresee a near-term green light for basket-based crypto ETFs and increased approval chances for altcoins such as Dogecoin and Cardano.
Historically, Grayscale’s crypto trusts offered arbitrage opportunities due to premiums or discounts relative to their net asset value (NAV), caused by lock-up periods and the lack of in-kind redemptions. As the company converts these trusts into ETFs, such arbitrage windows have narrowed. The objective of the new ETF is to closely track the weighted prices of its underlying digital assets, after deducting expenses and liabilities.
Grayscale has long been a pioneer in creating crypto investment products that provide traditional investors exposure to digital assets without holding crypto directly. This ETF conversion marks a significant milestone, reflecting growing regulatory maturity and broader mainstream acceptance within the industry.
The company’s efforts to convert its Bitcoin trust into an ETF initially faced resistance from the SEC, leading to a legal battle that began in June 2022. After more than a year of litigation, a federal judge ruled in August 2023 that the SEC’s denial was “arbitrary and capricious,” enabling Grayscale to move forward with its ETF plans. Today, Grayscale’s Bitcoin ETF carries the highest expense ratio in the market at 1.5%, but it remains the top revenue-generating Bitcoin investment product.
Overall, Grayscale’s success and the SEC’s evolving stance signal a new era for crypto investment access through traditional financial markets, potentially expanding opportunities for investors across a broader range of digital assets.
July 2025, Cryptoniteuae