SEC Approves Grayscale’s Digital Large Cap Fund Conversion to Spot ETF Dominated by Bitcoin

Key Points

1. Grayscale’s Digital Large Cap Fund is approved to operate as a spot ETF, tracking the CoinDesk 5 Index and including assets like Bitcoin (BTC), Ethereum (ETH), XRP, and Solana.

2. The SEC’s approval involved an accelerated rulemaking process and amendments to NYSE Arca’s index portfolios, setting a regulatory framework for crypto ETFs.

3. Grayscale’s legal victory in 2023, where the SEC’s prior rejection of its Bitcoin ETF was deemed 'arbitrary and capricious,' paved the way for this approval.

4. The fund’s approval enhances market liquidity and sets a regulatory benchmark for future multi-asset crypto ETFs, reflecting growing institutional interest.

5. Other firms like Bitwise, Hashdex, and Franklin Templeton have also filed for similar diversified crypto ETFs, indicating a competitive landscape.