The US Securities and Exchange Commission (SEC) enters the final stretch of its review of Grayscale Investments’ bid to convert the $760 million Digital Large Cap Fund (GDLC)—which includes Bitcoin, Ethereum, XRP, Solana and Cardano—into an exchange-traded fund, with the statutory deadline set for July 2. ETF Store president Nate Geraci told his followers on X in the early hours of Monday that there is a “high likelihood” the conversion will be cleared, adding that approval would “then be followed later by approval for individual spot ETFs on XRP, SOL, ADA, etc.”
Geraci’s optimism rests in part on the composition of GDLC. As of June 27 the fund holds 80.8 percent Bitcoin and 11.1 percent Ether, while XRP, Solana and Cardano account for a combined 8.1 percent—well below the weights that have historically triggered regulatory push-back on liquidity or market-manipulation grounds. “XRP, SOL & ADA represent <10 % combined of GDLC’s holdings. Easy way to slowly step into other assets,” he wrote, framing the multi-token product as a low-risk sandbox for the agency.
Spot XRP, SOL And Cardano ETFs Incoming
The incremental approach dovetails with the SEC’s own playbook. Spot Bitcoin ETFs were green-lit in January 2024 after a federal court faulted the Commission for inconsistent reasoning, and spot Ether ETFs followed seven months later.
Geraci argues that the Commission already has a template for limited non-traditional exposures. Since February the SEC has permitted up to 15 percent of an ETF’s portfolio to consist of illiquid private-credit instruments, provided sponsors can demonstrate robust valuation and liquidity controls. “No reason to not allow 10 % weighting to crypto assets besides already-approved BTC & ETH,” he noted, calling it “incongruent” to maintain different thresholds for digital assets.
Notably, regulatory engagement appears to have intensified. Grayscale filed an amended Form S-3 for GDLC on June 26, a move Geraci highlighted as evidence that “the SEC is clearly engaged.” The registration statement reiterates that NYSE Arca’s Rule 19b-4 proposal to list the shares cannot proceed without Commission sign-off, but it also supplies updated disclosure on custody, creation-unit size and index methodology—changes that typically occur only after iterative feedback from SEC staff.
External analysts share Geraci’s assessment. Bloomberg Intelligence’s James Seyffart told Blockworks last week that the agency could approve GDLC precisely because the non-Bitcoin, non-Ether tranche is so small; denying the application, he said, would force the SEC either to draft a comprehensive crypto-ETF framework on the fly or to explain why 8 percent exposure presents an insurmountable risk.
Seyffart and colleague Eric Balchunas have since lifted their probability of approval for most single-asset altcoin ETFs to 90 percent, citing “remarkably positive” regulator–issuer dialogue.
If the conversion is approved this week, GDLC would become the first US spot ETF to give investors regulated exposure to XRP, Solana and Cardano, albeit in modest proportions. More importantly, it would hand the SEC real-time surveillance data on trading, flows and creation-redemption activity—data that could underwrite subsequent decisions on standalone XRP, SOL and ADA funds later in 2025. Market participants will know by the close of business Wednesday whether that experiment is about to begin.
At press time, XRP traded at $2.18.
