Grayscale Files to Convert Multi-Crypto Fund into ETF

Key Points:

• The firm seeks to convert its $520 million multi-crypto fund into an ETF, simplifying trading for investors.
• Grayscale’s Digital Large Cap Fund holds 76% in Bitcoin and 18% in Ether, totaling over $524 million in assets.
• Grayscale files has faced $21 billion in outflows from its Bitcoin fund and $3 billion from Ethereum.

Grayscale files with the U.S. Securities and Exchange Commission to convert its $520 million fund tracking multiple cryptocurrencies into an exchange-traded fund.

Grayscale Seeks Approval to Convert Multi-Crypto Fund into ETF

In a filing on Oct. 14 through a 19b-4 filing by the New York Stock Exchange, the filing looks to amend the rules of the SEC to allow the new ETF listing.

Grayscale’s Digital Large Cap Fund currently manages more than $524 million in assets, which are divided among 76% being Bitcoin (BTC), 18% Ether (ETH), while the remaining share is spread among Solana at SOL, XRP, and Avalanche at AVAX. In this manner, it would now be easier for investors to acquire and sell shares of an ETF.

The latest filing by Grayscale follows the prior approvals of the SEC for conversions of the Grayscale Bitcoin Trust, or GBTC, and Grayscale Ethereum Trust, or ETHE, into ETFs. Until recently, the SEC had been rejecting all applications for spot crypto ETFs; however, an August court ruling that went in favor of Grayscale created a regulatory about-face.

Notable Outflows Following ETF Conversion Approvals

The spot ETFs hold the actual underlying assets and, therefore, do not have complications that come with futures contracts, making it an easy play for investors to trade shares. Still, after those conversions, massive outflows have hit Grayscale files, including $21 billion taken out of its Bitcoin fund since it first converted in January and $3 billion in Ethereum outflows since converting in July.

Grayscale files on October 10 expanded its scope of investment to 35 altcoins, with the inclusion of Dogecoin, Worldcoin, and Jupiter in a list of probable future investment products. The firm has not been shy about launching new crypto funds, recently announcing an Aave investment fund and an XRP Trust as it expands its suite of digital asset products.