SEC Reviews Proposal For First Multi-Crypto ETF

According to Cointelegraph, United States regulators are currently evaluating a proposal to list the first exchange-traded fund (ETF) that includes a diverse range of cryptocurrencies, as announced by asset manager Grayscale on November 4. The securities exchange NYSE Arca submitted a request to the Securities and Exchange Commission (SEC) on October 29, seeking approval to list shares of the Grayscale Digital Large Cap Fund (GDLC). Grayscale highlighted that the proposed rule change, if approved, would establish the first national securities exchange ruleset allowing the listing and trading of shares of multi-crypto asset ETFs. The GDLC fund, which was established in 2018, comprises a crypto index portfolio that includes Bitcoin (BTC), Ether (ETH), Solana (SOL), Avalanche (AVAX), and XRP (XRP). Despite its creation, the fund is not yet available for trading on public exchanges. As of November 4, GDLC manages approximately $534 million in assets, according to Grayscale’s website. The NYSE's request for a rule change was published in the federal register on November 4, initiating a 240-day period for the SEC to make a decision on whether to approve the ETF for trading. Grayscale faces competition from other proposed index funds, including those from asset managers Hashdex and Franklin Templeton. However, GDLC stands out by including altcoins such as SOL, AVAX, and XRP, whereas the Hashdex and Franklin Templeton funds plan to initially hold only BTC and ETH. Industry experts suggest that crypto index ETFs are becoming a significant focus for issuers following the listing of ETFs holding BTC and ETH earlier this year. Katalin Tischhauser, head of investment research at crypto bank Sygnum, noted that index ETFs are efficient for investors, similar to how people invest in the S&P 500 through ETFs. This trend is expected to extend to the crypto market. Asset managers and exchanges are actively filing to register various proposed altcoin ETFs, including funds holding SOL, XRP, and Litecoin (LTC), which analysts view as a strategic move in anticipation of the US presidential election outcome. David LaValle, Grayscale’s global head of ETFs, stated that Grayscale and NYSE Arca have carefully developed a proposed ruleset to facilitate the listing and trading of shares of multi-crypto asset ETPs within the SEC’s existing framework.