The U.S. Securities and Exchange Commission cleared the way for the first exchange-traded fund bundling a basket of cryptocurrencies, marking a breakthrough for the industry after a swath of approvals largely limited to bitcoin and ether.
The decision lets Grayscale Investments convert its Digital Large Cap Fund (ticker GDLC) into an ETF, giving U.S. investors regulated access to multiple digital tokens in one product. The fund allocates more than 70% to bitcoin and around 17% to ether, with the balance spread across XRP, Solana and Cardano, according to a fact sheet. Grayscale’s Chief Communications Officer Andrea Williams confirmed the development.
It’s yet another watershed crypto moment in a year that’s been full of them given the ease with which everyday investors will now be able to get exposure to lesser-known tokens via their brokerage accounts. And it foretells a wave of new altcoin products.
“We have some funds that hold bitcoin and ethereum but GDLC holds three additional assets. I think this is simply the first of many to come,” said Bloomberg Intelligence’s James Seyffart. “Crypto index or basket products are going to be one of the largest categories of crypto ETPs.”
An SEC spokesperson declined to comment.
Even as regulators warm to crypto during Donald Trump’s second term, the SEC has in recent weeks oscillated on allowing a multi-token fund to start trading in an ETF wrapper. Its changing stance recalls Grayscale’s push to flip its bitcoin trust into an ETF in early 2024, a legal fight that ultimately forced open the door to spot bitcoin products.
ETF issuers have been keen on being able to offer a more diversified range of crypto-based products given the success that those funds have seen in the U.S. The largest bitcoin ETF, one offered by BlackRock Inc., sports roughly $90 billion in assets.
Other firms are looking to put out multi-token funds as well. Pending applications include an Ark Investment Management actively managed crypto ETF and a filing from ETF issuer Bitwise. Separately, Trump Media & Technology Group Corp., whose largest shareholder is the U.S. president, earlier this year filed for a Truth Social Crypto Blue Chip ETF with exposure to Bitcoin, Ether, Solana, XRP and Cronos.
BI’s Seyffart predicts that Bitwise’s multi-token product, the Bitwise 10 Crypto Index Fund, could soon get approval, too. That fund, besides some of the largest tokens, also offers exposure to Sui, Chainlink, Avalanche, Litecoin and Polkadot.
Investors might soon be inundated by an overabundance of choice. The SEC on Wednesday separately approved a rule change letting exchanges fast-track listings for commodity-based ETFs, including those tied to certain crypto tokens. That means that various crypto-based products could imminently start trading in ETF form — and those funds would come on top of the roughly 90 crypto ETFs already on the market.
Still, Bitcoin and Ether — the two largest cryptocurrencies by market value — continue to dominate the asset class, accounting for more than 70% of total digital-asset capitalization by some estimates. That concentration has left smaller alternative coins struggling to gain meaningful traction, even as new products and trading vehicles aim to broaden investor exposure.
“If history is any indication, complex products are often marketed aggressively to everyday investors who may not fully understand the volatility or risks,” said Adam Gana, an attorney at law firm Gana Weinstein LLP.
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