XRP is moving closer to becoming a basket spot ETF as the US SEC granted Grayscale’s request to convert its Digital Large Cap Fund (GDLC) into an ETF.
Securities regulators recently confirmed they had received proposed rule changes for NYSE Arca that would allow Grayscale’s multicoin fund shares to be listed and traded. According to the notice, the NYSE has filed a filing under Section 19(b)(1) and Rule 19b-4 of the Securities Exchange Act of 1934.
For context, both rules allow self-regulatory bodies like the NYSE to propose rule changes that would be reflected in Grayscale’s request for GDLC stock to be listed and traded. The rationale behind this notice is for informational purposes and to invite public comment on the proposed rule changes.
Nate Geraci, president of ETF Store, shared the SEC’s notice yesterday, indicating the fund’s approval timeline has begun. If approved, Grayscale’s GDLC will become the first multi-fund spot crypto ETF in the United States.
The SEC has formally granted an application to convert the Grayscale Digital Large Cap Fund (GDLC) into an ETF…
GDLC holds approximately 77% BTC, 17% ETH, and the rest in sol, xrp, and avax.
The SEC is currently soliciting public comment and the clock is starting to tick on the decision. pic.twitter.com/5zl6vHmyKo
— Nate Geraci (@NateGeraci) October 30, 2024
https://x.com/thecryptabasic
Grayscale GDLC
Grayscale officially introduced the Digital Large Cap Fund on February 1, 2018. The fund includes a basket of assets including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP (XRP), and Avalanche (AVAX).
As of this writing, the fund has total assets under management (AUM) of $558.84 million. BTC, ETH, SOL, XRP, and AVAX account for 76.26%, 17.20%, 4.38%, 1.59%, and 0.57% of GDLC’s valuation, respectively.
Grayscale GDLC retention
Potential impact of GDLC ETF approval on XRP
Although XRP represents a minimal portion of GDLC’s valuation, the fund’s approval of the ETF could attract institutional investors to the XRP ecosystem. It may also increase the likelihood of approval of other spot-based XRP ETF applications.
As previously reported, Canary Capitals and Bitwise aim to launch a spot ETF tied exclusively to XRP. The companies filed applications with the SEC earlier this month.
However, despite being submitted before the Grayscale GDLC conversion request, regulatory authorities have not recognized these applications. This delay is expected and is likely due to the SEC vs. Ripple lawsuit. Both parties aim to overturn the district court’s ruling regarding Ripple’s XRP transactions and have filed preliminary arguments.
Despite speculation surrounding the possible launch of an XRP ETF, Ripple CEO Brad Garlinghouse is confident that the SEC will ultimately approve the fund.
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