Cryptocurrency asset management firm Grayscale has received approval from the U.S. Securities and Exchange Commission (SEC) to convert its Digital Large Cap Fund into an Exchange-Traded Fund (ETF). The fund comprises the top five cryptocurrencies by market capitalization from the CoinDesk 20 index, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Ripple (XRP), and Cardano (ADA).
Key Details of the ETF Conversion
The SEC approved the conversion one day before the decision deadline. Historically, the regulator had rejected Grayscale’s applications at the last minute. This approval marks a significant milestone for cryptocurrency investment vehicles.
Fund Weightings and Market Impact
- BTC Dominance: 80.2%
- ETH Allocation: 11.3%
- XRP Allocation: 4.8%
- SOL Allocation: 2.7%
- ADA Allocation: 0.81%
According to Bloomberg ETF analyst James Seyffart, the approval was widely anticipated. "The fund is over 90% Bitcoin and Ethereum," he noted in a July 1, 2025, post on X (formerly Twitter).
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Next Steps for Crypto ETFs
Bitwise, another crypto asset manager, awaits SEC approval to convert its Bitwise 10 Crypto Index Fund (BITW) into an ETF. BITW’s current holdings include:
- 79% Bitcoin
- ETH, XRP, SOL, ADA
- SUI, LINK, AVAX, LTC, DOT
Anticipated Wave of New ETF Filings
Analysts predict a surge in ETF applications targeting smaller altcoins like TRX, DOGE, SUI, AVAX, and LTC in late 2025. Seyffart and colleague Eric Balchunas "expect a new wave of ETFs in H2 2025."
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FAQs
1. What does Grayscale’s ETF approval mean for crypto investors?
It legitimizes crypto exposure through traditional investment vehicles, potentially attracting institutional capital.
2. Why are Bitcoin and Ethereum the primary holdings?
Their market dominance and regulatory clarity make them lower-risk anchors for ETFs.
3. When might altcoin-focused ETFs be approved?
The SEC has yet to greenlight ETFs solely for altcoins, but filings are expected to increase.
4. How does this impact altcoins like XRP and SOL?
Inclusion in diversified ETFs could boost liquidity and price stability.
5. What’s next for Bitwise’s BITW conversion?
A decision is expected by July 31, 2025, though the SEC may act sooner.
Final Thoughts
Grayscale’s ETF conversion sets a precedent for broader crypto adoption in regulated markets. As the SEC evaluates more filings, investors gain structured access to digital assets beyond BTC and ETH.
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