- This is a grayscale file for converting a multi-crypto fund to a spot ETF.
- Analysts warn of difficulties due to inclusion of XRP, SOL and AVAX
On October 14, cryptocurrency asset manager Grayscale applied to the U.S. Securities and Exchange Commission (SEC) to convert its multi-crypto fund into an ETF.
The company’s current digital large-cap stocks (GDLC) The fund has $524 million in assets under management and ranges from: Bitcoin (BTC), Ethereum (ETH), Solana (SUN), Ripple (XRP)and Avalanche (AVAX)).
BTC and ETH controlled over 90% of the fund.
Once approved, the fund will be traded. It’s on the New York Stock Exchange (NYSE), according to the filing. separate filingThe asset manager has notified investors of proposed rule changes for the fund.
Source: Samsung Electronics
Cryptocurrency Index ETF Competition
Converting a fund to a cash ETF makes it much easier to buy and sell shares of that fund. Grayscale converted two funds linked to BTC (GBTC) and ETH (ETHE) into spot ETFs this year.
However, currently the SEC only considers BTC and ETH to be commodities. In fact, other publishers who have made similar applications Cryptocurrency Index ETFLike Hashdex and Franklin Templeton, the application included only BTC and ETH.
However, Grayscale also included XRP, which lacks regulatory clarity given the ongoing litigation with the SEC.
According to ETF Store’s Nate Geraci, this move could be a bet on a change in administration after the US elections in November. that stated,
“Issuers appear to be betting on an “administrative change”…basically lining up if Trump wins, assuming that administrators will be much more cryptocurrency-friendly.”
Presto Research, a cryptocurrency research company, copy Applies as a potential path for altcoin ETF approval.
“This approval could potentially pave the way for future altcoin ETFs such as SOL, XRP, and AVAX, whose prospects for ETF eligibility are currently unclear with the SEC.”
However, Prestor Research analysts also noted that the road to application could be ‘bumpy’. Challenges of SOL ETFs In August.
In other words, ETFs converted to grayscale experienced intensified outflows, as seen in GBTC and ETHE. GBTC has lost over $20 billion in total flows since the conversion, while ETHE has seen outflows of nearly $3 billion.
It is not yet known how applications will proceed after the US election or whether other altcoins with unclear regulatory status will be approved.