crypto asset manager Grayscale is in the process of converting its Grayscale Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF). x.com/EricBalchunas/status/1846597139193123322″ target=”_blank”>according according to Bloomberg ETF expert Eric Balchunas.
The strategic move aims to provide investors with a diversified portfolio that includes major digital assets such as bitcoin (btc), ethereum (eth), Solana (SOL), XRP, and Avalanche (AVAX).
Diversified exposure to bitcoin, ethereum and more
The proposed ETF comes at a time when investor interest in regulated cryptocurrency products is increasing. Grayscale's Digital Large Cap Fund currently has approximately $524 million in assets under management, with a significant focus on bitcoin and ethereum.
Specifically, around 75% of the fund is allocated to bitcoin, while ethereum comprises approximately 19%, with the remaining investments spread across Solana, XRP, and Avalanche.
According information Additionally, this diversified approach is designed to offer a balanced entry point for investors seeking broader exposure to the cryptocurrency market.
The New York Stock Exchange (NYSE) had previously filed a 19b-4 application on behalf of Grayscale, seeking approval from the Securities and Exchange Commission (SEC) to amend its regulations to allow listing of this new ETF.
This filing comes after a pivotal year for the market, which recently saw spot ETFs approved for bitcoin and ethereum in January and July respectively, allowing these funds to hold actual tokens rather than relying on futures contracts.
This change comes after years of rejections of such index funds, prompted by a court ruling in favor of Grayscale that led the Securities and Exchange Commission headed by Gary Gensler to reconsider its stance.
Grayscale eyes fifth ETF launch this year
The successful conversion of Grayscale's Digital Large Cap Fund into an ETF would mark the firm's fifth launch this year, highlighting its strategy to expand its product offerings in response to growing demand for diverse exposure to digital assets.
Balchunas noted that the ETF's holdings, predominantly made up of bitcoin and ethereum, could provide enough flexibility to accommodate smaller, less liquid assets, which could pave the way for its approval.
Throughout the year, Grayscale's bitcoin and ethereum funds have seen significant outflows, with around $20 billion and $3 billion withdrawn respectively.
In response, the company has introduced lower-fee versions of these funds, attracting more than $700 million in inflows so far. These approvals have contributed to a surge in bitcoin and ethereum prices, indicating renewed investor confidence in the cryptocurrency market.
Other asset managers are also positioning themselves to launch ETFs that include smaller tokens such as Solana, XRP and Litecoin, with recent filings from Canary Capital and Bitwise Invest highlighting a broader trend toward integrating a broader range of cryptocurrencies into regulated investment vehicles, despite increased scrutiny from US regulators.
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At the time of writing, the largest cryptocurrency on the market, btc, is trading at $67,750, a substantial weekly increase of 11%.
Featured image of DALL-E, chart from TradingView.com
