The US Securities and Exchange Commission (SEC) has halted the planned launch of Grayscale’s Digital Large Cap Fund (GDLC), citing a need for further review. This move underscores the regulator’s continued cautious stance towards cryptocurrency exchange-traded funds (ETFs), particularly those bundling multiple assets including smaller altcoins.
Grayscale’s GDLC aims to provide exposure to a basket of major cryptocurrencies, predominantly Bitcoin (over 80%) and Ethereum (11%). Designed as an exchange-traded product, it seeks to offer improved liquidity and pricing transparency compared to some existing crypto investment vehicles.
The SEC’s pause of GDLC comes despite the agency’s landmark earlier approvals for spot Bitcoin and Ethereum ETFs originating from Grayscale and other firms. Those approvals, catalyzed by Grayscale’s key legal victory over the SEC, have attracted nearly $50 billion in investor capital, reflecting significant demand.
This hesitation regarding a large-cap multi-coin fund highlights the ongoing complexity and evolving nature of crypto asset regulation. While spot Bitcoin and Ethereum ETFs represent major progress, the SEC’s scrutiny of GDLC signals that broader crypto ETF adoption faces persistent regulatory challenges and thorough evaluation processes.