Grayscale Secures SEC Approval for Crypto ETF, Signaling Regulatory Shift

Grayscale Investments has received approval from the U.S. Securities and Exchange Commission (SEC) to convert its Digital Large-Cap Fund into an exchange-traded fund (ETF), marking a significant milestone in cryptocurrency market regulation. The newly approved ETF tracks a basket of five major cryptocurrencies, with Bitcoin (BTC) comprising 80.2% of the portfolio, followed by Ethereum (ETH) at 11.3%, XRP at 4.8%, Solana (SOL) at 2.7%, and Cardano (ADA) at 0.81%.

This approval comes amid reports that the SEC is considering streamlining its ETF approval process, potentially allowing issuers to bypass traditional 19b-4 applications in favor of simplified S-1 filings. Analysts suggest this regulatory evolution could accelerate approvals for other cryptocurrency ETFs, with Bloomberg experts now estimating a 95% probability of approval for Solana, XRP, and Litecoin spot ETFs by October 2025.

The development represents a breakthrough for Grayscale, which successfully challenged the SEC's initial rejection of its Bitcoin ETF conversion in a 2023 court ruling. The firm's Bitcoin Trust, now converted to an ETF, currently carries the industry's highest management fee at 1.5% while maintaining its position as the leading Bitcoin investment product by assets.

Industry observers note the SEC's apparent shift toward crypto acceptance, exemplified by recent approval of the first U.S. staked crypto ETF for Solana (STAK). This trend suggests growing institutional opportunities for altcoin exposure through regulated investment vehicles. Bloomberg analysts project 90% approval odds for ETFs tracking Dogecoin, Cardano, Polkadot, and other major altcoins in Q4 2025, though niche projects face greater regulatory uncertainty.

While the SEC maintains caution regarding staking features—recently delaying decisions on Ethereum and Bitcoin trust applications—the regulatory landscape appears increasingly favorable for cryptocurrency integration into traditional finance. Market participants await further SEC guidance on the proposed streamlined approval process, which could significantly reduce listing timelines for future crypto investment products.