Crypto asset manager Grayscale is converting its Grayscale Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF), According to By Bloomberg ETF expert Eric Balchunas.
This 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 of increasing investor interest in regulated cryptocurrency products. Grayscale’s Digital Large Cap Fund currently has approximately $524 million in assets under management, with a large focus on Bitcoin and Ethereum.
Specifically, about 75% of the fund is allocated to Bitcoin, while Ethereum makes up roughly 19%, with the remaining investments distributed among Solana, XRP, and Avalanche.
according to Reports In this regard, this diversified approach is designed to provide a balanced entry point for investors looking for broader exposure to the cryptocurrency market.
The New York Stock Exchange (NYSE) previously filed a 19b-4 filing on behalf of Grayscale, seeking approval from the SEC to amend its rulebook to allow the listing of this new ETF.
The introduction comes after a pivotal year for the market, which recently saw the approval of spot ETFs for Bitcoin and Ethereum in January and July respectively, allowing these funds to hold physical tokens rather than relying on futures contracts.
The shift comes after years of rejection of such index funds, prompted by a court ruling in Grayscale’s favor that prompted the Gary Gensler-led Securities and Exchange Commission to reconsider its position.
Grayscale aims to launch its fifth ETF this year
The successful conversion of Grayscale’s Digital Large Cap Fund into an ETF will mark the company’s fifth launch this year, highlighting its strategy to expand its product offerings in response to growing demand for exposure to diversified digital assets.
Balchunas noted that the ETF’s holdings, which mostly consist of Bitcoin and Ethereum, could provide enough flexibility to accommodate smaller, less liquid assets, paving the way for their approval.
Over the course of the year, Grayscale’s Bitcoin and Ethereum funds saw significant outflows, with about $20 billion and $3 billion withdrawn, respectively.
In response, the firm has rolled out lower-fee versions of these funds, attracting inflows of more than $700 million to date. These approvals have contributed to a rise in Bitcoin and Ethereum prices, indicating renewed investor confidence in the cryptocurrency market.
Other asset managers are also gearing up to launch ETFs that include smaller tokens such as Solana, XRP, and Litecoin, with them emerging recently. filings From Canary Capital and Bitwise Invest, highlighting a broader trend of integrating a wider range of cryptocurrencies into regulated investment vehicles, despite increasing scrutiny by US regulators.
At the time of writing, the largest cryptocurrency on the market, BTC, is trading at $67,750, a significant increase of 11% on a week-on-week basis.
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