Grayscale Investments has filed to convert its private Digital Large Cap Fund into an exchange-traded fund (ETF).
The ETF filing was submitted through an S-3 form to the U.S. Securities and Exchange Commission (SEC) on April 1. If approved, it would bring the fund to a wider audience and track approximately 75% of the digital asset market, excluding meme coins and stablecoins. Grayscale has not disclosed the final management fee, which is subject to change.
The push for new crypto ETFs has intensified following the approval of Bitcoin spot ETFs in January 2024, which were followed by Ethereum ETFs and a hybrid Bitcoin-Ethereum fund. U.S. Bitcoin ETFs now manage $97.27 billion in assets, while Ethereum ETFs hold $8.59 billion, according to CoinGlass. Grayscale’s Bitcoin spot ETF, however, has seen over $15 billion in outflows, marking the largest ETF withdrawal since March 2009. The rapid redemptions have raised concerns about how long the fund can sustain its Bitcoin reserves.
As crypto ETFs gain traction, issuers have begun filing for funds tracking alternative assets, including Dogecoin, XRP, Solana, and Donald Trump’s meme coin. Bloomberg ETF analyst Eric Balchunas speculated that the DOGE and TRUMP ETFs could launch in early April, but a Myriad Markets poll suggests otherwise, with 93% of voters believing the TRUMP ETF will not materialize by the end of the month.
Crypto index ETFs are becoming a priority for fund managers looking to expand offerings beyond single-asset products. The SEC approved the first mixed crypto index ETFs in December 2024, sponsored by Hashdex and Fidelity, but these only include Bitcoin and Ethereum. Since their February launch, they have seen relatively modest inflows. Katalin Tischhauser, head of investment research at crypto bank Sygnum, has noted that index ETFs provide efficiency for investors, similar to traditional market index funds.
Grayscale’s latest filing comes amid increased regulatory acceptance of crypto ETFs, though the market remains volatile. Despite broader institutional adoption, uncertainty lingers over long-term investor demand for digital asset funds.
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