SEC Approves Grayscale ETF with BTC, ETH, SOL, XRP, and ADA

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The U.S. Securities and Exchange Commission (SEC) has officially approved Grayscale’s application to convert its Digital Large-Cap Fund into a fully exchange-traded fund (ETF). This landmark decision marks a pivotal moment in the maturation of the cryptocurrency market, positioning Grayscale to launch the world’s largest multi-asset crypto ETF.

The approval, detailed in an SEC filing released this week, opens new doors for institutional and retail investors seeking diversified exposure to digital assets through a regulated financial product. With this transition, the fund gains enhanced liquidity, transparency, and alignment with traditional market standards—key factors that have long been demanded by mainstream finance.

👉 Discover how regulated crypto ETFs are reshaping investment strategies in 2025.

Bitcoin Dominates the Fund’s Composition

At the heart of the newly approved ETF lies Grayscale’s Digital Large-Cap Fund, which has managed digital assets since 2018 and currently holds approximately $755 million in assets under management (AUM). The fund is strategically weighted toward the most established cryptocurrencies by market capitalization.

Bitcoin (BTC) takes center stage, representing 80.2% of the portfolio. As the original and most widely adopted cryptocurrency, BTC continues to serve as the foundational asset in institutional crypto strategies. Ethereum (ETH) follows as the second-largest holding at 11.3%, reflecting its critical role in decentralized applications and smart contract ecosystems.

Additional allocations include:

This composition underscores a clear focus on large-cap digital assets with proven track records, liquidity, and developer activity. While smaller in weight, altcoins like SOL and ADA bring diversification benefits and exposure to high-growth blockchain platforms beyond Bitcoin and Ethereum.

Despite a relatively high expense ratio of 2.5%, the ETF structure significantly improves accessibility compared to the previous trust model. Investors now benefit from real-time pricing, easier trading on public exchanges, and reduced premium/discount volatility—features that were previously major pain points.

👉 Learn how multi-asset crypto ETFs offer smarter diversification for modern portfolios.

Arbitrage Opportunities Fade as Pricing Aligns

For years, Grayscale’s closed-end trust structure created persistent pricing discrepancies between the fund’s market value and the net asset value (NAV) of its underlying crypto holdings. Because investors couldn’t redeem shares for actual crypto, supply-demand imbalances led to premiums or discounts of up to 20–30%.

This gap fueled a thriving arbitrage trade: sophisticated players bought crypto directly, converted it into trust shares when possible, and sold at a premium—or shorted the shares when they traded above NAV.

Now, with the shift to an ETF structure, those inefficiencies are expected to diminish rapidly. The SEC mandates that the new ETF must closely track the value of its underlying assets through creation and redemption mechanisms enabled by authorized participants.

“The objective is for the share price to closely reflect the value of the digital assets held,” stated the SEC in its approval order.

This alignment enhances market efficiency and investor confidence, bringing crypto ETFs in line with traditional financial instruments like stock or commodity ETFs.

Bitwise Awaits Decision on Competing Multi-Crypto ETF

Grayscale’s approval follows a hard-fought legal victory that reshaped the regulatory landscape. In 2022, the SEC denied Grayscale’s bid to convert its Bitcoin Trust into an ETF—a decision that sparked a lawsuit. In 2023, a U.S. appeals court ruled in Grayscale’s favor, forcing the SEC to reassess applications under consistent standards.

That precedent has accelerated momentum across the industry. Bitwise Asset Management, another major player, is now awaiting SEC approval for its Bitwise 10 Crypto Index Fund (BITW). If approved, it would become a direct competitor to Grayscale’s offering.

The Bitwise fund is similarly weighted toward market leaders:

Like Grayscale’s fund, BITW aims to provide diversified exposure while adhering to regulatory compliance. Analysts view the SEC’s decision on Bitwise as increasingly likely given the precedent set by Grayscale’s win.

Frequently Asked Questions (FAQ)

Q: What is a multi-asset crypto ETF?
A: A multi-asset crypto ETF is an exchange-traded fund that tracks a basket of cryptocurrencies rather than a single asset. It allows investors to gain diversified exposure to major digital coins like BTC, ETH, SOL, XRP, and ADA through a single tradable security.

Q: Why is the Grayscale ETF approval significant?
A: This approval represents regulatory validation of crypto as a legitimate asset class. By allowing a diversified crypto ETF, the SEC acknowledges growing institutional demand and strengthens investor protection through transparency and market oversight.

Q: How does an ETF differ from a trust structure?
A: Unlike closed-end trusts, ETFs allow authorized participants to create or redeem shares based on underlying asset values. This mechanism minimizes price deviations from net asset value (NAV) and improves liquidity and pricing accuracy.

Q: Is this ETF only for U.S. investors?
A: While approved by the U.S. SEC, the ETF may be accessible internationally depending on local regulations and brokerage offerings. Non-U.S. investors should consult their financial advisors regarding availability and tax implications.

Q: Which cryptocurrencies are included in the Grayscale ETF?
A: The primary holdings are Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), with BTC making up over 80% of the portfolio. The selection reflects a focus on large-cap, high-liquidity digital assets.

Q: Will more altcoins be added in the future?
A: While no immediate changes have been announced, fund managers may adjust allocations based on market conditions and regulatory clarity. Assets like Chainlink (LINK), Polkadot (DOT), and Avalanche (AVAX are potential candidates if they meet listing criteria.

👉 See how next-generation crypto ETFs are unlocking institutional-grade access in 2025.

Core Keywords

The approval of Grayscale’s multi-token ETF signals a turning point—not just for one company, but for the entire digital asset ecosystem. As regulatory frameworks evolve and product offerings expand, investors gain safer, more efficient ways to participate in the future of finance. With Bitwise and others close behind, 2025 could become a defining year for diversified crypto ETFs worldwide.