Grayscale To Convert Multi-crypto Fund Into ETF
16 Oct, 2024 ● Coin news
Crypto asset manager Grayscale has submitted a filing with the U.S. Securities and Exchange Commission (SEC) to convert its $520 million cryptocurrency-tracking fund into an exchange-traded fund (ETF).
On Oct. 14, the New York Stock Exchange (NYSE), acting on Grayscale’s behalf, filed a 19b-4 form with the SEC, requesting a rule change to allow the listing of the new ETF.
Grayscale’s Digital Large Cap Fund currently manages over $524 million in assets, with 76% allocated to Bitcoin, 18% to Ethereum, and the remainder distributed among Solana, XRP, and Avalanche.
In a separate 8-K form, Grayscale informed its investors that the fund reflects the rule and listing changes proposed by the NYSE.
Converting the fund into a spot ETF would make it easier for investors to buy and sell shares.
This latest filing follows two major fund conversions earlier this year, in which the SEC approved Grayscale’s requests to convert the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE) into ETFs.
Previously, the SEC had rejected all applications for spot crypto ETFs until an August court ruling in favor of Grayscale prompted a change in the regulator’s stance.
Spot ETFs hold the actual underlying assets, unlike trusts and other non-spot crypto funds, which rely on futures contracts to track prices and involve additional regulatory complexities that make it harder for investors to trade shares.
After the conversion of GBTC and ETHE into ETFs, Grayscale investors began selling off their shares due to a significant change in the funds' discount to net asset value.
Six months before GBTC was converted, investors could buy shares at a 44% discount to the price of spot Bitcoin, according to YCharts data.
When the fund converted, those pricing discrepancies disappeared, allowing investors to cash out.
Since the conversion of GBTC to an ETF in January, the fund has experienced $21 billion in outflows, while the Ethereum ETF has seen $3 billion in outflows since its July conversion.
On Oct. 10, Grayscale added 35 altcoins, including Dogecoin, Worldcoin, and Jupiter, to its list of crypto assets “under consideration” for future investment products.
The company has been launching new crypto funds almost every month, most recently unveiling an Aave investment fund on Oct. 3, an XRP Trust on Sept. 12, and an Avalanche fund on Aug. 22.
Sources:
https://cointelegraph.com/news/grayscale-seeks-conversion-multi-crypto-fund-to-etf
https://www.grayscale.com/crypto-products/grayscale-digital-large-cap-fund
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001729997/000095017024114748/gdlc-20241015.htm
https://ycharts.com/companies/GBTC/discount_or_premium_to_nav
