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Grayscale, a top investment asset management firm, has filed a significant request with the Securities and Exchange Commission (SEC). According to James Seyffart, Bloomberg’s ETF analyst on X, the filing seeks to convert the Grayscale Digital Large Cap Fund (GDLC) into a spot ETF. One of the core focus tokens in the fund is XRP.
Conversion to ETF could expand market access
This move means that Grayscale seeks to transform its current fund structure into an ETF. If approved, the request will allow the asset management firm to trade the product on the New York Stock Exchange (NYSE) floor.
Other notable tokens in the Grayscale mixed-crypto fund include Bitcoin, Ethereum, Solana and Avalanche. This will make the crypto assets more accessible to prospective investors.
Grayscale’s GDLC, with an asset under management of $534 million, currently trades over the counter. Its present structure is a closed-end fund, allowing investors to gain exposure to various large-cap cryptocurrencies. Closed-end funds, by design, do not trade their Net Asset Value (NAV).
By filing for a conversion into an ETF, Grayscale could trade the funds closer to their NAV and provide investors more liquidity, transparency and access. ETFs are better regulated than closed-end funds, so they will also attract more institutional investors.
XRP’s inclusion heightens pressure on SEC
Available information on Grayscale’s website shows that the GDLC primarily comprises Bitcoin and Ethereum, at 76% and 18%, respectively. The duo makes up approximately 94% of the total token in it. The recent filing, therefore, reflects Grayscale's ongoing efforts to expand its product offerings.
Including XRP in the filing puts more pressure on the SEC. Considering the ongoing legal dispute between the SEC and Ripple, the company linked to XRP, the regulatory body will need to take a stance on the token.
Additionally, the SEC has to consider the pending applications for approval of an ETF for the crypto asset. Bitwise made history by becoming the first asset manager to file for a spot in XRP ETF at the beginning of the month. Canary Capital, a Nashville-based firm launched by alternative asset manager Valkyrie, has joined the XRP ETF race with its filing.