Grayscale Wins Accelerated SEC Approval to Launch ETF Featuring Bitcoin, Ethereum, Solana, XRP, and Cardano — Will More Altcoin ETFs Follow Soon?

Grayscale’s Digital Large-Cap Fund Set to Become ETF Following SEC Approval

The US Securities and Exchange Commission (SEC) has greenlit Grayscale’s move to convert its Digital Large-Cap Fund into an exchange-traded fund (ETF), marking a key step for crypto investment products.

The fund, which until now traded over the counter exclusively for accredited investors, holds mainly Bitcoin at just over 80%, with Ethereum, XRP, Solana, and Cardano making up the remainder.

This approval comes amid a broader shift within the SEC towards a more open stance on cryptocurrency-related ETFs.

Industry experts like Nate Geraci, president of the ETF Store, suggest this could pave the way for further approvals of spot ETFs tracking individual assets such as XRP, Solana, and Cardano.

Geraci highlighted that “xrp, sol, & ada represent < 10% combined of GDLC’s holdings,” viewing Grayscale’s ETF as a “nice 'test run' for addn’l crypto assets in ETF wrapper.”

The SEC’s accelerated approval process, via a modified rule change (SR-NYSEARCA-2024-87), signals increased regulatory willingness to accommodate crypto funds within traditional markets.

The fund aims for its share price to closely reflect the underlying value of the digital assets it holds, minus expenses, offering investors direct exposure to crypto without needing to hold the currencies themselves.

Grayscale’s Legal Victory Paved the Way

Grayscale’s path to ETF status has not been straightforward.

The SEC initially denied its attempt to convert its Bitcoin trust into an ETF, prompting a legal challenge.

In August 2023, a US federal judge ruled the SEC’s denial was “arbitrary and capricious,” allowing Grayscale to advance its conversion efforts.

This ruling set an important precedent in the crypto ETF space.

Grayscale’s Bitcoin ETF, which now trades with a 1.5% expense ratio—the highest in the market—has also become the leading Bitcoin investment vehicle by revenue.

Bitcoin ETFs’s inflow since 13 June 2025. (Source: Farside Investors)

The firm’s transformation from crypto trusts to ETFs has reduced arbitrage opportunities that once allowed investors to profit from price premiums and discounts.

Could Regulatory Streamlining Speed Up Crypto ETF Listings?

Beyond Grayscale’s approval, the SEC is reportedly considering changes to its ETF listing process.

The agency may allow issuers to file a form S-1 registration statement instead of the longer and more complex 19b-4 application, potentially cutting review times to around 75 days without extensive back-and-forth.

While details remain scarce, this streamlined approach could encourage a broader range of crypto ETFs to hit the market faster.

Pending applications include spot ETFs for Solana, Dogecoin, XRP, Litecoin, and Ethereum, with some analysts giving these products up to a 95% chance of approval by late 2025.

Staking and Altcoin ETFs Face Mixed Signals

The SEC’s stance on staking remains cautious.

Recent delays on decisions regarding Bitwise’s spot Ether ETF and the Osprey Bitcoin Trust show regulators remain careful with products involving staking rewards or new features.

However, the approval of the REX Shares Solana ETF, which incorporates staking rewards, hints at a potential opening for staking-enabled funds in the future.

Approval probabilities differ among crypto projects, with mainstream altcoins like Dogecoin, Cardano, Polkadot, and Avalanche likely to gain ETF status, while lesser-known tokens such as Sui and Tron face a more uncertain road.

Should Crypto ETFs Become the New Norm for Digital Asset Investing?

Grayscale’s conversion and the SEC’s shifting regulatory approach raise a critical question: will crypto ETFs replace direct cryptocurrency holdings as the primary vehicle for investor exposure?

ETFs provide ease of access, regulatory oversight, and reduce the technical barriers of managing wallets or exchanges.

Yet, as the market grows, will these investment vehicles maintain transparency and pricing integrity without the arbitrage dynamics that once defined crypto trusts?

The unfolding developments challenge the traditional boundaries between conventional finance and the crypto world, hinting at a future where digital assets might be standard components in everyday portfolios, but governed by the rules of Wall Street.