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Grayscale to Convert Digital Asset Fund into ETF

Grayscale plans to transform its Digital Large Cap Fund into an ETF, targeting broader investor access despite recent outflows and regulatory hurdles.

1 min 20 secOctober 17, 2024

Highlights:

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Aims to diversify with major cryptocurrencies like BTC and ETH.

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Faces challenges amid significant outflows from existing ETFs.

Grayscale to Convert Digital Asset Fund into ETF

Grayscale Investments has filed with the U.S. Securities and Exchange Commission (SEC) to convert its Grayscale Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF). This strategic move, submitted on October 15, aims to provide investors with a diversified portfolio that includes major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Avalanche (AVAX).

 

 

Currently, GDLC manages approximately $524 million in assets, with Bitcoin making up about 76% and Ethereum around 18% of its total holdings. The remaining assets are allocated to SOL, XRP, and AVAX. This conversion would mark Grayscale’s first multi-crypto ETF, allowing for easier trading compared to its current over-the-counter structure, which has led to GDLC shares trading at a significant discount to their net asset value.

 

 

Despite the potential benefits of this conversion, Grayscale's Bitcoin and Ethereum ETFs have faced substantial outflows this year, amounting to $20 billion and $3 billion respectively. The ongoing regulatory scrutiny around various cryptocurrencies may complicate the approval process for the GDLC ETF. 

 

Analysts suggest that a shift in the regulatory landscape could occur following the upcoming U.S. presidential elections, potentially influencing the SEC's stance on crypto assets. If approved, this ETF could significantly impact how investors engage with digital assets in the U.S. market.

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