SEC Approves Grayscale’s Digital Large-Cap Fund Conversion to ETF

SEC Approves Grayscale’s Digital Large-Cap Fund Conversion to ETF — A New Era for Altcoin ETFs?

The U.S. Securities and Exchange Commission (SEC) has officially approved Grayscale’s Digital Large-Cap Fund to be converted into an Exchange-Traded Fund (ETF), signaling a major shift in the evolution of cryptocurrency investment products.

This fund tracks the CoinDesk Five Index, comprising the top five cryptocurrencies by market capitalization

Bitcoin (BTC): 80.2%

Ethereum (ETH): 11.3%

XRP: 4.8%

Solana (SOL): 2.7%

Cardano (ADA): 0.81%

From Trust to ETF: A Strategic Move

This conversion aims to eliminate pricing inefficiencies that were common under Grayscale’s former trust structure. Trust products often faced lock-up periods and lacked redemption mechanisms, creating discrepancies between market price and actual NAV. The ETF model offers greater liquidity, transparency, and tighter price tracking.

Grayscale stated that the fund aims to reflect market-weighted asset allocation in line with real-time pricing.

SEC Streamlines ETF Approval — Altcoin ETFs Set to Accelerate

Alongside this approval, the SEC is reportedly developing a new, streamlined ETF approval process. Currently, applicants must file both Form 19b-4 (via the exchange) and S-1 registration statements (via the issuer). The new process would allow qualifying ETFs to be automatically approved 75 days after filing only the S-1, significantly reducing regulatory friction.

With over 70 altcoin ETF applications currently pending, this procedural reform could lead to a wave of approvals in the near future.

An ETF analyst noted, “This framework could unlock the financialization of altcoins, accelerating their adoption among institutional investors.”

Grayscale’s Digital Large-Cap Fund has been approved as an ETF, reflecting growing regulatory confidence in crypto-based products.

The SEC is planning to simplify ETF approval, enabling faster and more predictable pathways for altcoin ETFs.

These developments could boost market maturity, liquidity, and investor confidence in the digital asset sector.