The U.S. Securities and Exchange Commission (SEC) has officially approved the conversion of Grayscale’s Digital Large Cap Fund (GDLC) into a spot exchange-traded fund (ETF), marking a pivotal development in the digital asset industry. This landmark decision paves the way for the world’s largest multi-token digital asset ETF, offering investors diversified exposure to leading cryptocurrencies through a single, regulated financial product.
The newly approved ETF tracks the performance of the CoinDesk 5 Index (CD5), which includes five of the most prominent and liquid digital assets: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Cardano (ADA). This strategic composition enables investors to gain broad market exposure without managing multiple individual holdings.
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A New Era for Crypto ETFs
Launched in February 2018, GDLC has steadily grown its assets under management to nearly $755 million, reflecting strong institutional and retail interest in digital assets. With an expense ratio of 2.5%, the fund is positioned as a premium investment vehicle offering both accessibility and regulatory compliance.
Bitcoin dominates the fund’s allocation, accounting for approximately 80% of its total holdings. The remaining 20% is distributed across Ethereum, Solana, XRP, and Cardano—assets selected for their market capitalization, liquidity, and technological significance within the blockchain ecosystem.
Andy Baehr, Head of Product and Research at CoinDesk Indices, emphasized the importance of this milestone:
“We’re thrilled with the SEC’s approval, which clears the path for this Grayscale fund—tied to the CoinDesk 5 Index—to list as an ETF. This allows investors and advisors to capture the largest and most liquid digital assets in a single product.”
Baehr also confirmed that this ETF will become the largest multi-token digital asset ETF globally, setting a new benchmark for diversified crypto investment products.
Why This Approval Matters
The SEC’s green light signals growing regulatory acceptance of digital assets as legitimate components of modern investment portfolios. Unlike single-asset ETFs—such as those focused solely on Bitcoin—this multi-asset structure offers built-in diversification, reducing reliance on any one cryptocurrency’s performance.
This development could accelerate broader adoption among traditional financial institutions and wealth managers who have previously hesitated to enter the crypto space due to volatility and custody concerns. A regulated ETF format addresses many of these issues by providing transparency, daily pricing, and integration with standard brokerage platforms.
Moreover, inclusion in the CD5 index means each asset must meet strict criteria around trading volume, exchange availability, and security protocols. This ensures that only the most established and resilient projects are represented, enhancing investor confidence.
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The Competitive Landscape: What’s Next?
Grayscale’s approval puts pressure on other major players in the crypto asset management space. Notably, Bitwise is awaiting a decision from the SEC on converting its Bitwise 10 Crypto Index Fund (BITW) into a spot ETF. If approved, BITW would offer exposure to a broader basket of ten digital assets.
Currently, BITW holds approximately 79% in Bitcoin, with the remainder allocated across Ethereum, XRP, Solana, Cardano, Sui (SUI), Chainlink (LINK), Avalanche (AVAX), Litecoin (LTC), and Polkadot (DOT). While more diversified than GDLC, BITW faces additional scrutiny due to the inclusion of newer or less-regulated assets.
The contrast between GDLC’s focused approach and BITW’s expansive model highlights two emerging philosophies in crypto ETF design: concentrated exposure to market leaders versus broad diversification across emerging innovators. Investor demand will likely shape which model gains dominance in the years ahead.
Key Benefits of Multi-Token Crypto ETFs
- Diversification: Reduces risk by spreading exposure across multiple high-performing assets.
- Regulatory Oversight: Operates under SEC supervision, ensuring compliance and transparency.
- Ease of Access: Available through traditional brokerage accounts—no need for crypto wallets or exchanges.
- Liquidity: Traded on major stock exchanges with real-time pricing during market hours.
- Professional Management: Backed by experienced firms like Grayscale and indices like CD5.
These advantages make multi-token ETFs particularly appealing to long-term investors seeking growth opportunities in blockchain technology without navigating the complexities of direct crypto ownership.
Frequently Asked Questions (FAQ)
Q: What is a multi-token crypto ETF?
A: It's an exchange-traded fund that tracks a basket of multiple cryptocurrencies, allowing investors to gain diversified exposure through a single security traded on traditional stock exchanges.
Q: How does this Grayscale ETF differ from Bitcoin-only ETFs?
A: Unlike single-asset Bitcoin ETFs, this fund includes Ethereum, Solana, XRP, and Cardano—providing broader market coverage and reduced concentration risk.
Q: Is this ETF available to all investors?
A: Yes, it will be accessible through most major brokerage platforms in the U.S., similar to other ETFs.
Q: What index does the GDLC ETF track?
A: The fund follows the CoinDesk 5 Index (CD5), which benchmarks the performance of BTC, ETH, SOL, XRP, and ADA based on market cap and liquidity.
Q: Are there tax advantages to investing in a crypto ETF?
A: While not tax-exempt, ETFs offer more straightforward tax reporting compared to direct crypto trading, where each transaction may trigger taxable events.
Q: Can I hold this ETF in my retirement account?
A: Potentially—many brokerages allow ETFs in IRAs and other retirement accounts, though investors should confirm with their provider.
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Looking Ahead: The Future of Digital Asset Investing
The approval of Grayscale’s multi-token ETF represents a significant leap toward mainstream integration of digital assets. As regulatory frameworks mature and investor demand grows, we can expect further innovation in structured crypto products—including sector-specific funds, staking-based returns, and ESG-aligned blockchain initiatives.
For now, this ETF stands as a powerful gateway for traditional investors to participate in the ongoing evolution of finance. By combining trusted oversight with exposure to transformative technologies, it bridges the gap between Wall Street and Web3.
With GDLC poised to launch as the world’s largest multi-token digital asset ETF, 2025 is shaping up to be a defining year for crypto adoption—and the ripple effects will likely be felt across global markets for years to come.