Grayscale’s proposal to convert its Digital Large Cap Fund (GDLC) into a spot ETF made headway this week after the U.S. Securities and Exchange Commission (SEC) on Tuesday gave the sign-off on an accelerated basis for the listing and trading of the fund on NYSE Arca. However, investors will have to wait longer as its debut has been temporarily delayed. SEC Hits Pause On GDLC Conversion To ETF The SEC put a pause on converting the Grayscale Digital Large Cap Fund LLC a day after agency staff approved the fund to start trading. “This letter is to notify you that, pursuant to Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action,” the letter, addressed to the New York Stock Exchange, stated . “In accordance with Rule 431(e), the July 1, 2025 order is stayed until the Commission orders otherwise.” It can be found here on the SEC website. We have a few theories as to why this happened. 1. The SEC doesn't want to let anything to launch under the 19b-4 process until they officially approve or come up with some framework for digital assets in the ETF wrapper. pic.twitter.com/WegC5d2Tcj — James Seyffart (@JSeyff) July 2, 2025 Bitcoin comprises around 80% of the fund’s holdings. Roughly 11% of the ETF’s assets would be in Ethereum, while Solana accounts for approximately 2.8% of the fund, Ripple’s XRP commands over 4.8%, and Cardano (ADA) has a weighting of 0.8% in the fund. The SEC told NYSE that it would let it know “of any pertinent action taken by the Commission.” Bloomberg ETF analyst James Seyffart suggested the delay may be tied to the SEC’s ongoing efforts to create an internal framework for issuing crypto exchange-traded products. The SEC doesn’t want to let anything launch under the 19b-4 process until they officially approve or come up with some framework for digital assets in the ETF wrapper,” Seyffart noted . Bloomberg’s senior ETF analyst Eric Balchunas concurred with this observation. The plot thickens. Upper level of SEC telling $GDLC it can't launch until otherwise notified. Not sure why, no other info than this letter. My guess tho: They want to issue the crypto ETP listing standards before any '33 act spot ETFs hit market with these other coins. So likely… https://t.co/Za7rYk1o0E — Eric Balchunas (@EricBalchunas) July 2, 2025 While the SEC greenlighted Bitcoin and Ethereum spot ETFs, it has yet to give the nod to other altcoin spot products, including those tracking the price of Solana, XRP, and Cardano. The Bloomberg analysts are confident the regulator will approve such crypto products by year-end, though.
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