Grayscale just scored a major victory. The U.S. Securities and Exchange Commission finally gave the thumbs-up for Grayscale to turn its Digital Large-Cap Fund into a full-fledged crypto ETF.
Digital Large-Cap Fund, the new favorite?
Now, what’s the deal with this Digital Large-Cap Fund? It’s a basket holding the top five cryptocurrencies, with Bitcoin flexing its muscles at 80.2% of the portfolio.
Ethereum’s tagging along at 11.3%, Solana’s got 2.7%, XRP holds 4.8%, and Cardano’s ADA sneaks in at 0.81%.
So, if you want to ride the crypto wave without juggling wallets or exchanges, maybe this ETF is your new best friend.
Crypto ETFs let you invest in digital currencies through your regular stock market accounts. No need to wrestle with complicated crypto wallets or worry about hacks.
Some ETFs hold the actual coins, the spot ETFs for example, while others play the futures game or track indexes.
Grayscale’s move means more traditional investors can now dip their toes in the crypto waters with less hassle and more safety.
Approval for basket-based crypto ETFs?
Grayscale’s earlier attempts to convert its Bitcoin trust into an ETF hit a brick wall with the SEC.
The regulators said no, and Grayscale fought back, taking the SEC to court in June 2022. Fast forward to August 2023, a federal judge called the SEC’s denial arbitrary and capricious. Boom! That legal win opened the floodgates for Grayscale’s ETF ambitions.
We’ve filed a lawsuit against the SEC. $GBTC
— Sonnenshein (@Sonnenshein) June 30, 2022
This approval comes at a time when the SEC is reportedly thinking about simplifying the crypto ETF approval process.
Imagine skipping the long, boring application process and going straight to a faster S-1 filing.
Analysts are buzzing, saying spot ETFs for Solana, XRP, and Litecoin have a 95% chance of getting the nod by October. Even altcoins like Dogecoin and Cardano are in the spotlight, with Bloomberg experts predicting near-term approvals for basket-based crypto ETFs.
Weighed prices
Grayscale’s new ETF wants to track the weighted prices of its cryptocurrencies, minus expenses and liabilities, making it a cleaner, more transparent investment tool.
The days of arbitrage opportunities from fund premiums or discounts? Those are fading as Grayscale shifts from trusts to ETFs.
Also, the SEC’s changing stance signals a new era, crypto is stepping out of the shadows and marching into mainstream finance with quite big steps.
For investors stuck in the office, dreaming of that big break like a salesman hitting a sales home run, this is your chance to get in on the action without the usual crypto headaches.
Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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