Grayscale Investments has applied to the U.S. Securities and Exchange Commission (SEC) to convert its Digital Large Cap Fund into an exchange-traded fund (ETF). The fund, which is currently traded over the counter, includes Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Avalanche (AVAX).
In the application filed by the New York Stock Exchange (NYSE) on Grayscale’s behalf, the company seeks a rule change to enable the fund’s listing to public markets.
Grayscale Seeks to Expand Crypto ETF Offerings
The ETF would track a market cap-weighted index comprised of the five largest cryptocurrencies. However, following the regulator’s recent openness to other spot crypto ETFs, Grayscale hopes the SEC will approve the conversion.
If the fund is approved, it will offer institutional investors wider exposure to digital assets. Grayscale Investments is expanding its ETF offerings in response to increasing demand for crypto products on Wall Street.
According to the company, growing interest from institutional investors shows the necessity of becoming a diversified crypto ETF. The move comes after successfully converting Bitcoin and Ethereum Trusts into spot ETFs earlier in the year.
NYSE Files for Rule Change to Support Grayscale Fund
The NYSE sought the SEC’s approval to list the Grayscale Digital Large Cap Fund as an ETF in a 19b-4 filing. In addition, the stock exchanges can propose new or amend existing rules for the latest financial products with this form.
If the SEC agrees to the transition, the fund can move forward to public trading on the exchange. The SEC’s approval of the conversion can take several months, making the fund’s tangible conversion timeline uncertain.
However, Grayscale’s prior success against the SEC in its Bitcoin ETF case makes this new attempt more promising. If the ETF is approved, it would be another big step toward crypto’s acceptance as a mainstream financial product for institutions.
Grayscale Seeks to Leverage Institutional Interest
Grayscale’s application reflects the growing demand for institutional-grade crypto products. On Tuesday, Grayscale competitors such as Canary Capital filed an S-1 renewal with the U.S. Securities and Exchange Commission (SEC) with intentions of pursuing a Litecoin ETF.
While not focusing entirely on existing funds, Grayscale is investigating new digital assets for future products. In a recent blog post, the company mentioned 35 tokens under review, including Aptos (APT), Toncoin (TON), and Dogecoin (DOGE).
The SEC has not yet made a decision on the issue, but industry optimism about crypto ETFs continues to grow.
