Grayscale has filed with the SEC to convert its $520 million digital large-cap fund that tracks multiple cryptocurrencies into a spot ETF. This transformation will make it easier for investors to trade the stock.
Grayscale Investments, the largest digital asset manager, is in the process of converting its digital large-cap fund into an exchange-traded fund (ETF). The fund includes popular cryptocurrencies such as Bitcoin, Ethereum, Solana, XRP, and Avalanche, and is currently awaiting approval from the US SEC. Grayscale’s latest actions demonstrate the company’s desire to expand and strengthen its position in the crypto ETF market.
Grayscale is not a new player in the ETF market either. The Digital Currency Group-backed firm played a major role in the move to acquire a Spot Bitcoin ETF in the US, and recently converted the Grayscale Bitcoin Trust (GBTC) into Spot Bitcoin. The effort resulted in a big win against the SEC. ETF. Since then, the company has shifted its focus to growing its ETF business, including recently approving the conversion of Ethereum Trust into a spot ETF.
Grayscale filed a 19b-4 form for approval to convert its Digital Large Cap Fund to an ETF. Currently, investors can invest in a basket of the best cryptocurrencies through funds, but by converting a fund into an ETF, investors can easily gain liquidity and exposure to the fund. Masu.
Interest in virtual currency products is increasing on Wall Street
Institutional interest in cryptocurrencies shows no signs of waning as more Wall Street players enter the market. Nate Geraci, president of ETF Store, recently spoke about the growing interest in crypto-based ETFs, noting that investors are shifting their focus to such products.
The transition to a digital large-cap fund comes after two other significant moves by Grayscale this year. Prior to that, the SEC also granted Grayscale’s petition to convert its Bitcoin Investment Trust (GBTC) and Ethereum Investment Trust (ETHE) into ETFs. This move towards ETFs has brought about some big changes for the market and investors.
Prior to the conversion to GBTC, GBTC shares were trading at a discount of up to 44% to the BTC spot price. This discount made it easier for investors to buy Bitcoin through the trust at a lower price. After switching to the ETF, the discount disappeared and GBTC traded at a premium or price parity with the underlying Bitcoin.
As a result, many investors sold their stocks in hopes of profiting from the new pricing. Since then, crypto assets such as GBTC have seen $21 billion in outflows, and the ETH ETF has seen $3 billion in outflows since its changes in July.
The U.S. Securities and Exchange Commission has not been friendly to the identification of crypto ETFs, but these recent changes signal a shift. Grayscale’s legal victory in the Bitcoin ETF case sets precedent, and the company could resort to similar measures if the SEC does not quickly approve its conversion into a digital large-cap fund. .
Meanwhile, other companies are also developing new ETF products. For example, Canary Capital has filed to launch a Litecoin ETF and recently filed for an XRP ETF.
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