Asset management firm Grayscale has taken a decisive step in its strategy to democratize crypto investments. On April 1st, the company officially filed an S-3 form with the Securities and Exchange Commission (SEC) to convert its ‘Digital Large Cap Fund’ into an exchange-traded fund (ETF). This move demonstrates a clear intent to offer investors a product that provides exposure to a diversified basket of spot cryptocurrencies.
Grayscale transforms its crypto fund into an ETF
Launched in 2018 but previously only available to accredited investors, the Digital Large Cap Fund consists of prominent cryptocurrencies including Bitcoin, Ethereum, Solana, XRP, and Cardano. According to Grayscale, the fund currently manages over $600 million in assets. The fund’s accessibility will be expanded with its conversion into an ETF.
This conversion attempt follows a previous request made in October by NYSE Arca, the US exchange seeking to list the fund. The move comes in the wake of more favorable regulatory conditions, particularly as the Trump administration has adopted a more accommodating stance towards digital assets.
The crypto index: a new playing field for ETF issuers
While the first Bitcoin and Ethereum index ETFs emerged last year, issuers are now striving to go further by offering broader exposure to the crypto market, similar to traditional index funds like the S&P 500. This is precisely what Grayscale aims to achieve with this new vehicle, which includes both established leaders and high-potential altcoins.
This trend is part of a broader movement. Since December, the SEC has approved several mixed ETFs, including those offered by Hashdex and Fidelity, although these are still limited to BTC and ETH.
A strategic battle for Wall Street
The stakes go beyond simply listing a new ETF. For financial giants, indexed products represent the next frontier to conquer in the crypto space. Over a dozen applications are currently under review by the US regulator, encompassing new funds, staking options, and derivative products.
The logic is clear: indices are an effective allocation tool for investors. What works with the S&P 500 could also work with crypto. Grayscale is determined to prove this on the markets.
