Grayscale Seeks Approval to Convert Its Multi-Crypto Fund Into ETF

Grayscale, a popular crypto asset manager, has submitted a filing to the United States Securities and Exchange Commission (SEC) seeking to convert its $520 million fund, which tracks various cryptocurrencies, into an exchange-traded fund (ETF).

On October 14, the New York Stock Exchange (NYSE) filed a 19b-4 request on Grayscale’s behalf, aiming to modify SEC rules to facilitate the launch of a new ETF.

Grayscale’s Digital Large Cap Fund currently manages over $520 million, with a significant allocation of 76% to Bitcoin (BTC), 18% to Ether (ETH), and the remaining funds distributed among Solana (SOL), XRP, and Avalanche (AVAX).

Enhanced Trading for Investors

The crypto asset manager informed investors that the fund adheres to the proposed rule and listing adjustments from the NYSE. According to Grayscale, transitioning to a spot ETF would enable investors to buy and sell shares conveniently.

Spot ETFs directly hold the underlying assets, unlike trusts and other crypto funds that use futures contracts, which can complicate the buying and selling process for investors.

Grayscale’s recent filing comes after two significant conversions earlier this year, when the SEC approved the company’s proposals to transform the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE) into ETFs.

Following previous ETF conversions, Grayscale investors have begun selling off shares due to changes in the discount on the fund’s net asset value. Six months before the GBTC conversion, investors could purchase shares at a 44% discount compared to the price of spot BTC, according to YCharts data. Many GBTC investors profited from this when the fund converted, eliminating pricing discrepancies.

Since the conversion of its Bitcoin fund in January, Grayscale has experienced $21 billion in outflows, while the Ethereum ETF has recorded $3 billion since its July conversion.

Grayscale Expands Investment Portfolio 

On October 10, Grayscale expanded its investment horizons by adding 35 altcoins, including Dogecoin, Worldcoin (WLD), and Jupiter (JUP), to a list of potential assets for future investment products. The firm has also been actively launching new crypto funds, unveiling an Aave (AAVE) investment fund, an XRP Trust, and an Avalanche (AVAX) fund.