Grayscale large crypto fund is now SEC registered

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  • Grayscale Digital Large Cap Fund (GDLC) is now registered with the Securities Exchange Commission (SEC).
  • Accredited investors who purchased shares in the fund’s private placement now have the opportunity to liquidate after six months.
  • Grayscale has voluntarily filed three additional registrations for its altcoin trusts and they are currently under SEC review.

GDLC’s SEC registration comes at a time when the overall market outlook is bearish. The new regulated fund is likely to increase the inflow of institutional investment in cryptocurrencies and have a bullish impact on the crypto market. 

The first crypto investment fund to get a regulatory nod

Earlier today, Grayscale announced that the registration statement it filed for GDLC with the SEC is now effective. This makes it the first diversified crypto fund to get SEC nod under the Securities Exchange Act of 1934, as amended (Exchange Act).

The registration reduces the statutory holding period for accredited investors who purchased GDLC shares from 12 months to 6 months. Shortening the lock-in period makes it lucrative for institutions to purchase GDLC shares in a private placement, thus increasing institutional inflow in crypto. 

Each GDLC share represents a basket of 67.49% Bitcoin (BTC), 25.35% Ethereum (ETH), 4.30% Cardano (ADA), 1.03% Bitcoin Cash (BCH), 0.96% Litecoin (LTC), and 0.87% Chainlink (LINK). 

Grayscale also announced the public filing of three additional registration statements with the SEC for its Bitcoin Cash, Ethereum Classic, and Litecoin Trusts. 

The Grayscale Bitcoin Trust and Ethereum Trust are registered with the SEC and the new filings take the firm one step closer to the launch of its own Exchange Traded Fund (ETF). These filings and regulatory approval are events that aid institutions in gaining exposure to cryptocurrencies within the existing regulatory framework. 

Craig Salm, Vice President of Legal at Grayscale Investments said 

Grayscale aims to provide the investment community with a higher level of disclosure and reporting on top of the already stringent obligations to which our products adhere.

Consistently improving the standards to which they hold their products, Grayscale is following the steps in its roadmap to launch a digital currency ETF. 

Another milestone reinforcing Grayscale’s commitment to launch an ETF

The regulatory nod to GDLC is yet another milestone reinforcing Grayscale’s commitment to move its digital currency investment products forward, as announced in a blog post in April 2021. 

The current voluntary filing requests submitted for BCH, ETC and LTC Trusts should not be confused as an effort to classify it as an exchange-traded fund (ETF). However, Grayscale has previously outlined its plan to offer its products for trade on a national securities exchange.

The asset manager made it clear that it is 100% committed to converting GBTC to an ETF. The recent filings and approvals from the SEC make the institution’s products and performance further transparent for clients and regulators. 

In recent months, several firms have filed applications for Bitcoin ETFs with the SEC. Grayscale’s recent announcements are likely to attract new buyers that hope the price will catch up to the value of underlying assets once the asset manager takes further steps towards an ETF conversion.