Grayscale's Crypto Mutual Fund receives regulatory endorsement
The U.S. Securities and Exchange Commission (SEC) has taken a significant step forward in the digital marketing industry by approving Grayscale's Digital Large Cap Fund (GDLC), marking it as the first multi-asset crypto exchange-traded product (ETP). This approval comes after a year-long delay in approving digital asset funds.
The GDLC, which offers a diversified basket of cryptocurrencies including bitcoin, ether, XRP, Solana, and Cardano, was part of the initial class of vehicles for both assets. The approval of this fund, according to Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research, will reduce barriers to accessing digital asset products in the U.S.
In a move that is set to streamline the approval process, the SEC has also approved rule changes for generic listing standards for exchange-traded products (ETPs) holding digital assets. These new standards will allow exchanges to list commodity-based ETPs and ETFs holding crypto without individual agency reviews for each fund. This change is expected to significantly reduce the approval process from 240 days.
The approval of the GDLC in January 2024 was followed by the SEC's approval of 11 funds invested in bitcoin. However, as of last month, 92 different crypto funds are still awaiting approval, many of them tied to lesser-known assets like Avalanche and Bonk.
Hugentobler also stated that the approval of the GDLC marks a milestone for the industry but won't fully assess its success until after the bear market portion of the cycle. He further added that the concept of crypto mutual funds has been around for some time but may take a while to fully mature.
The diversified nature of the GDLC, with its inclusion of bitcoin and ether, may give individual investors more confidence in its relative stability. It is expected that there will be additional financial products based on the ETPs and ETFs, such as options.
In a related development, a few months later, the SEC approved five ether-based funds. The generic listing standards, which were not explicitly attributed to a specific person or organization in the search results provided, are expected to facilitate the offering of commodity-based ETPs and ETFs in crypto, potentially opening up a new era for the crypto industry in the U.S.
Grayscale still hopes to convert its Chainlink Trust into an ETF, further expanding its footprint in the digital marketing space. With the SEC's approval of the GDLC and the new generic listing standards, it seems that the future of crypto ETPs and ETFs in the U.S. is looking increasingly promising.
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