The Securities and Exchange Commission has placed a stay on Grayscale Investment Trust’s Digital Large Cap Fund (GLDC) conversion to an exchange-traded fund, despite approving the fund on Monday, preventing the multi-asset crypto product from launching until further notice.
The stay order creates uncertainty around the timing of the first diversified crypto ETF launch in the U.S. market, with analysts suggesting the delay may stem from the SEC’s desire to establish broader digital asset listing standards before allowing new crypto products to trade.
The SEC granted accelerated approval for GDLC to convert to an ETF trading on NYSE Arca, according to the filing. However, a separate letter from Deputy Secretary J. Matthew DeLesDernier notified the exchange that the Commission will review the delegated action, automatically triggering a stay under Rule 431 of the Commission’s Rules of Practice.
The fund tracks the CoinDesk 5 Index and holds Bitcoin at an 80.4% weighting, Ethereum at 11.2%, XRP at 4.8%, Solana at 2.9% and Cardano at 0.8%, according to Grayscale data as of July 1. Assets under management totaled $754.7 million, with more than 15.8 million shares outstanding.
James Seyffart, Bloomberg Intelligence ETF analyst, posted on X that the SEC may want to avoid launches under the 19b-4 process until officials approve a framework for digital assets in ETF form. The analyst also suggested the delay could relate to specific aspects of the fund’s structure.
Bloomberg Senior ETF Analyst Eric Balchunas offered a different theory in a separate X post, suggesting the delay likely stems from the SEC’s plans to issue crypto ETP listing standards before spot ETFs with alternative coins hit the market.
The approval would have marked the second multi-asset crypto ETF for U.S. investors after Hashdex launched the Nasdaq Crypto Index US ETF (NCIQ) in February.
The stay prevents trading until the SEC orders otherwise, according to the letter. The Office of the Secretary will notify the exchange of any action taken by the agency.
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