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Grayscale, a major investment asset management company, has filed a significant request with the Securities and Exchange Commission (SEC). The filing is aimed at converting the Grayscale Digital Large Cap Fund (GDLC) into a spot ETF, according to James Seifert, an ETF analyst on Bloomberg’s X. One of the featured core tokens of the fund is XRP.
Converting to ETFs may expand market access
The move means Grayscale is converting its current fund structure into an ETF. If the request is approved, asset management companies will be able to trade products on the floor of the New York Stock Exchange (NYSE).
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Other notable tokens in the Grayscale Mixed Crypto Fund include Bitcoin, Ethereum, Solana, and Avalanche. This makes crypto assets more accessible to prospective investors.
Grayscale’s GDLC has $534 million in assets under management and is currently traded over the counter. The current structure is a closed-end fund that allows investors to gain exposure to a variety of large cryptocurrencies. Closed-end funds, by design, do not trade net asset value (NAV).
By applying to convert into an ETF, Grayscale will be able to trade funds closer to NAV, providing more liquidity, transparency and access to investors. ETFs are more regulated than closed-end funds, so they will likely attract more institutional investors.
Adoption of XRP increases pressure on SEC
According to information available on Grayscale’s website, GDLC is primarily comprised of Bitcoin and Ethereum, at 76% and 18% respectively. This duo accounts for approximately 94% of the total tokens within it. The recent filing therefore reflects Grayscale’s continued efforts to expand its product offering.
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Including XRP in the filing will further increase pressure on the SEC. Considering the ongoing legal dispute between the SEC and Ripple, a company associated with XRP, the regulatory body will need to take a stance regarding the token.
In addition, the SEC must consider pending applications for approval of crypto-asset ETFs. Bitwise made history by becoming the first asset manager to apply for a spot on the XRP ETF at the beginning of the month. Canary Capital, a Nashville-based company launched by alternative asset management firm Valkyrie, has filed an application to join the XRP ETF race.
