30s Summary

US regulators are considering a proposal by asset manager Grayscale for the first fund to incorporate multiple cryptocurrencies. NYSE Arca has approached the SEC about listing shares from Grayscale’s Digital Large Cap Fund (GDLC), which includes Bitcoin, Ether, Solana, Avalanche and XRP. If approved, it will be the first time a national securities exchange has allowed such a listing. Grayscale has also filed a request to turn the fund into an ETF. The GDLC, which was set up in 2018 and has assets of $534m, has yet to be traded publicly.

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The bigwigs in the crypto world, US regulators, are taking a look at a proposal to launch the first fund that includes different types of cryptocurrencies. The proposal has been put forward by Grayscale, a well-known asset manager.

On October 29, NYSE Arca, a securities exchange, approached the Securities and Exchange Commission (SEC) asking if it’s okay to list shares from Grayscale’s Digital Large Cap Fund (GDLC).

If the powers-that-be give the thumbs up, this will be the first time the main rules of a national securities exchange have allowed the listing and trading of shares across multiple crypto assets.

The fund includes a portfolio of cryptos such as Bitcoin (BTC), Ether (ETH), Solana (SOL), Avalanche (AVAX) and XRP. The fund’s been around since 2018, but it hasn’t hit public exchanges yet.

The GDLC has assets worth around $534 million up to November 4, according to Grayscale’s own figures.

Not long before NYSE’s filing, on October 16, Grayscale filed a request to transform the fund into an ETF. On November 4, the NYSE’s proposed rule change was officially published in the federal register. Now, there’s a countdown of 240 days for the SEC to say yay or nay to trading the ETF.

Although Grayscale is facing competition from other proposed index funds – including those from asset managers Hashdex and Franklin Templeton – the GDLC is the only one throwing altcoins such as SOL, AVAX and XRP into the mix. The others are planning to stick to just BTC and ETH to start off with.

Experts are tipping that the focus for crypto ETFs is likely on index ETFs next. They make things easier for investors, much like how people buy the S&P 500 as an ETF. That’s according to Katalin Tischhauser, who is the super-smart head of investment research at crypto bank Sygnum.

There’s a flurry of applications going on to register altcoin ETFs, with various funds wanting to include SOL, XRP and Litecoin (LTC). Analysts reckon this could be a sneaky ploy depending on who wins the next US presidential election.

Grayscale and NYSE Arca are taking a careful approach to developing a rule set that could list and trade shares across multiple crypto assets, within the existing standard of the SEC. That’s what David LaValle, the global head of ETFs at Grayscale, said in a statement.