- The SEC is expected to approve Grayscale’s Digital Large Cap Fund (GDLC) conversion into a spot ETF this week, giving U.S. investors regulated exposure to XRP, Solana, and Cardano for the first time.
- Experts say the fund’s limited altcoin allocation makes approval likely, potentially paving the way for future standalone ETFs for each asset.
The U.S. Securities and Exchange Commission (SEC) is expected to make a landmark decision this week on Grayscale Investments’ proposal to convert its $760 million Digital Large Cap Fund (GDLC) into a spot exchange-traded fund (ETF).
According to Nate Geraci, president of The ETF Store, there is a “high likelihood” that the SEC will approve the conversion, potentially opening the door to regulated exposure for XRP, Solana (SOL), and Cardano (ADA) for the first time in U.S. markets.
Geraci shared the news on X, noting that the SEC’s July 2 deadline for reviewing Grayscale’s amended Form S-3 filing places the decision in its final stretch. GDLC currently holds 80.8% Bitcoin and 11.1% Ethereum, with XRP, Solana, and Cardano together comprising just 8.1% of the fund.
According to Geraci, the relatively small allocation to altcoins positions GDLC as a “low-risk sandbox” for the SEC to test multi-asset crypto ETFs without overexposing investors to perceived volatility or liquidity concerns.
“XRP, SOL & ADA represent less than 10% combined of GDLC’s holdings,” Geraci wrote. “It’s an easy way for the SEC to slowly step into other assets.”
The structure aligns with the Commission’s incremental approach to crypto regulation. After a U.S. court ruled against the SEC’s prior denial, spot Bitcoin ETFs were approved in January 2024. Spot Ethereum ETFs followed seven months later. Now, experts believe that Grayscale’s GDLC—containing only modest exposure to other digital assets—offers a logical next step in that progression.
The SEC’s approval of similar portfolio diversification in traditional finance adds further weight to the argument. Since February, the agency has permitted up to 15% exposure to illiquid private-credit instruments within ETFs, provided proper risk management frameworks are in place. Geraci argued there is “no reason to not allow 10% weighting to crypto assets besides already-approved BTC & ETH,” calling the current inconsistency “incongruent.”
Grayscale’s recent filing updates on June 26 signal active regulatory engagement, including revised disclosures on custody, index methodology, and fund mechanics. Bloomberg Intelligence analysts James Seyffart and Eric Balchunas echoed Geraci’s optimism, raising their approval probability for GDLC to 90%. Seyffart added that a denial would require the SEC to either draft an entirely new crypto ETF framework or justify why an 8% non-BTC/ETH exposure constitutes an unacceptable risk.
If approved, GDLC would be the first U.S. spot ETF to offer direct, regulated exposure to XRP, Solana, and Cardano. Beyond its immediate impact, such approval would also give the SEC access to real-time trading and redemption data, paving the way for individual spot ETFs for these altcoins in 2025.
Investors and market watchers alike now await a final decision, expected by the close of business Wednesday.