Main Points:
- Grayscale’s Digital Large Cap Fund (GDLC) received ETF conversion approval on July 1, 2025, but was immediately stayed by the SEC.
- The SEC is formulating unified listing standards for crypto exchange-traded products (ETPs), delaying individual approvals until a comprehensive framework is in place.
- Other asset managers—Bitwise, Franklin Templeton, Hashdex—are waiting on multi-asset ETF approvals under the new standards.
- Market focus now shifts to the July 31, 2025, deadline for the SEC’s decision on Bitwise’s multi-asset ETF application.
- Investors may benefit from more streamlined, faster ETF listings once the unified ETP criteria are finalized.
Background: The Grayscale Digital Large Cap Fund
Grayscale launched GDLC in February 2018 as a basket fund tracking large-cap digital assets, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Cardano (ADA). Publicly trading since November 22, 2019, the fund boasts roughly $775 million in assets under management as of July 1, 2025, with approximately 91% allocated to BTC and ETH. GDLC offers investors exposure to diversified token baskets without the complexities of custody and trading individual coins.
Approval and Immediate Stay
On July 1, 2025, the SEC’s Division of Trading and Markets approved NYSE Arca’s proposed rule change permitting GDLC’s conversion to an exchange-traded fund. However, later that same day, the full Commission issued a stay order, halting the ETF’s debut indefinitely and offering no clear timeline for lifting the freeze. This rare intervention at the commissioner level underscores the SEC’s caution when confronting novel multi-asset crypto products.
SEC’s Drive for Unified Crypto ETP Standards
Industry analysts—including Bloomberg’s Eric Balchunas and James Seyffart—interpret the stay as a strategic pause while the SEC crafts standardized listing requirements for crypto ETPs under Section 19b-4 of the Securities Exchange Act. Once adopted, these criteria will replace the case-by-case, often intricate, approval process, allowing simultaneous, transparent vetting of multiple products. The unified framework is expected to clarify surveillance, custody, and trading protocol expectations, benefiting both issuers and investors.
Timeline of Key Dates
Above: Timeline of July 2025 milestones—ETF approval on July 1, stay order same day, and the July 31 decision deadline for Bitwise’s multi-asset ETF.
Pending Multi-Asset ETF Applications
Several prominent asset managers have filed for similar basket ETFs:
- Bitwise: Seeks to launch a large-cap crypto basket ETF; SEC decision due July 31, 2025.
- Franklin Templeton: Filed in early 2025 for a BTC‒ETH combination product, which could benefit from the unified criteria.
- Hashdex: Partnered with NYSE Arca for a diversified crypto index ETF, originally expected to list alongside GDLC.
The SEC’s coordinated approach may signal that these filings will be evaluated simultaneously under the forthcoming standards, reducing redundant reviews and time to market.
Market and Investor Implications
- Enhanced Efficiency: A unified listing framework could cut weeks off approval timelines, as issuers navigate a single, clear rulebook rather than bespoke carve-outs.
- Broader Diversification: Investors will gain access to regulated, multi-asset crypto ETFs—rather than single-asset products—enabling portfolio hedging across leading tokens.
- Regulatory Clarity: Clear surveillance and custody requirements will bolster institutional participation, reducing concerns over market manipulation and asset safety.
Outlook: What to Watch Next
- July 31, 2025: SEC’s decision deadline on Bitwise’s multi-asset ETF application—anticipated to coincide with an announcement of the new ETP listing standards.
- Fall 2025: Potential rollout of unified listing requirements, paving the way for simultaneous approvals of GDLC and peer products.
- Investor Positioning: Traders and fund managers might prepare for opening windows, hedging positions in anticipation of multi-asset ETF launches.
Conclusion
The SEC’s stay on Grayscale’s Digital Large Cap Fund conversion marks a pivotal moment for crypto ETF regulation. By pausing GDLC’s debut, regulators signal a shift toward comprehensive, standardized ETP criteria that promise faster, more transparent listings for multi-asset offerings. As Bitwise’s application decision looms on July 31, 2025, the industry watches closely: a finalized framework could unlock a new era of diversified, regulated crypto investment vehicles—an attractive proposition for those seeking novel digital-asset revenue streams.
