In an official communication, the renowned asset manager Grayscale confirmed plans to convert its funds to crypto exchange-traded funds (ETF). The New York Stock Exchange (NYSE) submitted the filing on behalf of its client, Grayscale, requesting the US Securities and Exchange Commission to grant the asset managers legal rights to move its funds into ETFs.
The filing 19b-4 explained the features and similarities of Grayscale Digital Large Cap Fund (GDLC) and ETFs. The report shows that both the GDLC and ETF expose retail and institutional investors to digital assets.
Grayscale Seeks to Gain Dominance in Crypto ETF
A review of the Tuesday filing demonstrates that the GDLC comprises the top 20 largest crypto by market capitalization. As per recent estimation the GDLC was worth $520 million of crypto assets.
The largest shares constitute Bitcoin at 76% followed by the second largest crypto Ethereum with 18% shares. Other assets comprise best-performing cryptos such as Solana, Avalanche, and XRP.
News concerning the conversion of the Grayscale fund sparked the brief surge of GDLC to trade at $23.15 on the NYSE. Data shows that the GDLC has been in demand since it exposed investors to digital assets.
The growing demand for GDLC forced the asset manager to convert the funds to ETF, allowing the investors to trade their shares seamlessly. Previously, the investors could not redeem their GDLC shares since the financial products were closed-end funds.
Significance of Converting Grayscale’s GDLC into ETF
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However, with the conversion to ETF, the Grayscale expects fast movement of funds and easy accessibility of crypto assets. The asset manager explained that compared to ordinary shares, the EFT offers investors direct exposure to crypto, gold, and various financial products even without investing in these products.
The filing accompanied by 8-K demonstrated that the GDLC aligns with the listing and requirement of NYSE Arc. If the SEC greenlights GDLC conversion to ETF, it will be ranked as Grayscale’s three major developments in 2024.
Crypto ETFs Inflows Surges
Previously, the SEC approved the conversion of Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE) into crypto exchange-traded funds. The new filing came when Bitcoin ETFs have witnessed massive inflows.
According to CryptoQuant, the Bitcoin ETF inflows reached $555 million. Correspondingly, the Grayscales has generated $21 billion in outflows in GBTC and $3 billion in ETHE by July.
The massive inflow encouraged the asset manager to diversify its investment options to add over 35 altcoins to its list of crypto assets. In October, the Grayscale team confirmed that these altcoin will become an investment product.
Despite the impressive performance of crypto ETFs, the SEC has extended its enforcement action to companies that issued unregistered securities, such as Solana. Even though it’s still unclear how crypto assets are grouped, the new filing might compel the SEC to clarify which assets are securities and commodities.
For more updates on whether the SEC will approve the conversion of GDLC to ETF, follow The Bitjournal on X, Telegram, and LinkedIn.
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