Grayscale aims to turn its multi-asset Digital Large Cap Fund into an ETF that tracks major cryptocurrencies, potentially becoming its fifth ETF launch of the year if approved by regulators.
American digital currency asset management company Grayscale Investments is continuing its foray into the world of exchange-traded funds (ETFs). Its latest plan is to convert its Grayscale Digital Large Cap Fund into an ETF. This multi-asset fund monitors the performance and market value of five leading crypto assets: Bitcoin BTC $68 124 24h volatility: 0.4% Market cap: $1.36 T Vol. 24h: $33.30 B , Ether ETH $1 992 24h volatility: 1.3% Market cap: $241.23 B Vol. 24h: $18.33 B , Solana SOL $85.05 24h volatility: 1.1% Market cap: $48.35 B Vol. 24h: $3.02 B , XRP XRP $1.46 24h volatility: 2.6% Market cap: $88.85 B Vol. 24h: $2.05 B , and Avalanche AVAX $9.20 24h volatility: 0.2% Market cap: $3.97 B Vol. 24h: $174.83 M .
The fund could soon be available on the New York Stock Exchange (NYSE) pending regulatory approval from the US Securities and Exchange Commission (SEC). In a recent filing by the NYSE on Tuesday, Grayscale highlighted its commitment to providing broader access to cryptocurrencies through diversified exposure.
If approved, this would mark Grayscale’s fifth ETF launch of the year. Notably, the asset management giant previously secured approval for the conversion of its Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE) into spot Bitcoin and Ether ETFs, respectively. Moreover, it also launched two mini versions of these funds with a cheaper fee option.
Grayscale’s recent venture comes at a time of mixed results for its other crypto ETFs, particularly the GBTC and ETHE. These two funds have seen massive investor outflows since their launches. According to data from Farside Investors, the two funds combined have faced withdrawals over $23 billion. Despite these challenges, Grayscale continues to generate revenue, largely driven by the high fees tied to these ETF products.
Rising Demand for Crypto ETFs
As per the data by SoSoValue, January-approved spot Bitcoin ETFs have cumulatively recorded $19.73 billion in inflows since their launch. This success has triggered a fresh wave of filings for cryptocurrency-based investment funds. In July, the SEC approved eight spot Ether ETFs, further raising hopes for more crypto-based ETFs.
Interestingly, industry giants have already started filing for ETFs tracking other major digital assets. Earlier this month, Canary Capital and Bitwise submitted applications to launch ETFs tracking Ripple’s XRP. These filings come despite the ongoing struggles Ripple is facing with the SEC.
Similarly, in July, leading asset management firms, VanEck and 21Shares, were working with the SEC on the approval of spot Solana (SOL) ETF applications. However, the filings disappeared from the CBOE website, suggesting a potential delay or reconsideration of the proposal.
Meanwhile, Grayscale has recently expanded its list of potential investment products by adding 35 crypto tokens, including meme coins, to the assets under consideration. The firm has also been steadily rolling out new crypto funds. It introduced an Aave investment fund on October 3, an XRP Trust on September 12, and an Avalanche fund on August 22.
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