Grayscale plans to transform multi-crypto fund into ETF

Grayscale Investments has submitted a request to the U.S. Securities and Exchange Commission (SEC) for permission to convert its Digital Large Cap Fund into an exchange-traded fund (ETF). This follows Grayscale’s earlier transformation of its Bitcoin and Ethereum Trusts into spot ETFs, signifying significant regulatory changes for cryptocurrency funds.

The proposed ETF would enable investors to purchase a mix of major digital currencies, including Bitcoin, Ethereum, Solana, XRP, and Avalanche. 

Currently, the Digital Large Cap Fund manages approximately $524 million in assets, with 75% allocated to Bitcoin and 19% to Ethereum. The remainder is invested in Solana, XRP, and Avalanche, highlighting Grayscale’s commitment to offering more than just Bitcoin and Ethereum.

This initiative is part of Grayscale’s strategy to expand its ETF offerings, catering to the growing demand for broader digital currency investments. If approved by the SEC, this will be Grayscale’s fifth ETF in 2024.

The SEC’s recent endorsement of Bitcoin and Ethereum spot ETFs has prompted other companies to explore ETFs for smaller cryptocurrencies. Grayscale’s initiative could pave the way for more multi-crypto ETFs, simplifying access and trading of digital assets for investors.

Earlier this year, the CEO of Grayscale expressed his support for the approval of options trading on spot Bitcoin ETFs. He believes that options can benefit investors by improving pricing and strategy. 

On February 5, he urged regulators to allow this, stating that options help in understanding market prices and assist investors in managing conditions or achieving specific goals, such as generating income.

Two weeks ago, Grayscale launched the Grayscale Aave Trust, a new fund focused on AAVE, a cryptocurrency used on the Aave lending platform. The fund is available only to accredited investors. 

These investors must earn more than $200,000 a year (or $300,000 with a spouse), have a net worth exceeding $1 million (excluding their home), or hold certain investment licenses. Businesses must have $5 million in assets or owners who meet these standards.