The world of cryptocurrency is witnessing a pivotal shift as institutional adoption inches closer to reality. At the forefront of this transformation stands Grayscale, the largest digital asset manager in the crypto ETF space, making headlines with a bold new filing that could reshape how traditional investors access altcoins.
In a significant development, Grayscale has submitted a 19b-4 form to the U.S. Securities and Exchange Commission (SEC), requesting approval to convert its Grayscale Digital Large Cap Fund (GDLC) into a spot-based, mixed-asset crypto exchange-traded fund (ETF). If approved, this would mark the first time a U.S.-listed ETF includes not only Bitcoin (BTC) and Ethereum (ETH) but also high-profile altcoins like Solana (SOL), Ripple (XRP), and Avalanche (AVAX).
This move underscores growing confidence in the long-term viability of digital assets and signals a strategic expansion beyond the two largest cryptocurrencies.
Why a Mixed Crypto ETF Matters
Traditionally, crypto ETFs have focused solely on Bitcoin or Ethereum—assets the SEC has cautiously accepted as non-securities. However, Grayscale’s latest proposal challenges that boundary by including SOL, XRP, and AVAX, all of which occupy a gray area in regulatory classification.
By packaging these assets into a single, regulated investment vehicle, Grayscale aims to:
- Increase market accessibility for retail and institutional investors.
- Enhance liquidity across multiple blockchain ecosystems.
- Offer a compliant, transparent, and audited way to gain diversified exposure to top-tier digital assets.
Currently trading at $23.15 per share, the GDLC fund has delivered a year-to-date return of 33.35%, with over 10% growth in the last quarter alone. This performance reflects strong market sentiment and growing demand for diversified crypto exposure.
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The Regulatory Hurdle: Are SOL, XRP, and AVAX Securities?
One of the biggest challenges facing Grayscale’s application lies in how the SEC classifies certain altcoins. While BTC and ETH have been granted ETF approvals under the argument that they are commodities, the same cannot be said definitively for SOL, XRP, or AVAX.
The SEC has previously indicated that Solana (SOL) may fall under securities law due to its initial distribution model and ongoing ecosystem development funded by centralized entities. Similarly, Ripple (XRP) remains under legal scrutiny following the SEC’s lawsuit alleging unregistered securities offerings—a case that, while partially resolved, continues to cast uncertainty over XRP’s status.
Avalanche (AVAX), though less scrutinized, could face similar classification debates depending on governance structure and token issuance practices.
“If the SEC treats SOL or XRP as securities, including them in an ETF becomes legally complex,” said a financial regulatory analyst. “Grayscale is testing the limits of current policy.”
Despite these hurdles, industry experts view this filing as a strategic step toward normalizing broader crypto adoption within traditional finance.
Market Demand for Crypto ETFs Is Rising
Investor appetite for crypto-backed ETFs is surging. According to a recent survey by Charles Schwab Corporation, 45% of ETF investors express interest in allocating capital to cryptocurrency-based ETF products in the near future.
This demand is driven by several factors:
- Growing recognition of blockchain technology’s long-term value.
- Desire for portfolio diversification beyond stocks and bonds.
- Increased trust in regulated financial institutions offering crypto exposure.
With Bitcoin and Ethereum ETFs already approved and performing strongly in 2024, the logical next step is expanding inclusion to other major players in the ecosystem. SOL, XRP, and AVAX rank among the most widely used blockchains for decentralized finance (DeFi), smart contracts, and cross-border payments—making them compelling candidates for institutional inclusion.
What Changed in the Fund Composition?
Notably, Grayscale updated the underlying assets in its Digital Large Cap Fund earlier this year. In April 2024, the fund included Cardano (ADA) and Polygon (MATIC). However, those were later replaced with XRP and AVAX, suggesting a strategic pivot toward assets with stronger real-world utility and higher trading volumes.
This shift reflects evolving market dynamics and Grayscale’s intent to focus on protocols with scalable infrastructure and global adoption potential.
FAQ: Your Questions About Grayscale’s Mixed Crypto ETF
Q: What is a mixed crypto ETF?
A: A mixed crypto ETF is an exchange-traded fund that holds multiple cryptocurrencies—such as BTC, ETH, SOL, XRP, and AVAX—allowing investors to gain diversified exposure through a single tradable security regulated under U.S. securities law.
Q: Has any mixed crypto ETF been approved in the U.S.?
A: Not yet. While spot Bitcoin and Ethereum ETFs have received SEC approval in 2024, no multi-asset crypto ETF has been cleared. Grayscale’s filing could set a precedent if successful.
Q: Why include XRP given its legal history with the SEC?
A: Despite past litigation, XRP was partially deemed non-security in a 2023 ruling regarding programmatic sales. Including it signals confidence in its evolving regulatory clarity and widespread use in cross-border payments.
Q: How does this affect the price of SOL, XRP, and AVAX?
A: Approval could significantly boost demand by opening the door to trillions in institutional capital. Even speculation around approval often leads to positive price momentum due to increased visibility and legitimacy.
Q: Can I invest in the Grayscale Digital Large Cap Fund now?
A: Yes, but currently only as a private trust product (GDLC). Converting it into an ETF would make shares tradable on public exchanges like NYSE or Nasdaq, improving liquidity and lowering fees.
Q: What happens if the SEC rejects the application?
A: Grayscale may appeal or revise the proposal. The firm has a track record of persistence—its years-long legal battle ultimately led to Bitcoin ETF approval.
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The Bigger Picture: A Step Toward Mainstream Adoption
Grayscale’s move isn’t just about one fund—it’s part of a broader effort to integrate digital assets into mainstream finance. By pushing for inclusion of SOL, XRP, and AVAX alongside BTC and ETH, Grayscale is advocating for a more inclusive definition of what constitutes an investable digital asset.
Approval would send a powerful message: that well-established blockchains with real utility deserve a place in regulated investment products.
Moreover, it could encourage other asset managers—like BlackRock, Fidelity, or VanEck—to explore similar multi-asset strategies, accelerating innovation across the financial sector.
As regulatory frameworks evolve and market demand intensifies, 2025 may become the year when altcoins finally gain equal footing in institutional portfolios.
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Final Thoughts
Grayscale’s latest filing represents more than a product upgrade—it’s a statement. The inclusion of Solana, XRP, and Avalanche in a proposed spot crypto ETF signals growing confidence in their technological maturity and market resilience.
While regulatory challenges remain significant, especially concerning classification as securities, the momentum behind crypto ETFs is undeniable. With investor interest at an all-time high and institutional infrastructure rapidly maturing, the path toward broader crypto adoption is clearer than ever.
For investors watching from the sidelines, this development offers a compelling reason to pay closer attention—not just to Bitcoin and Ethereum, but to the next generation of blockchain platforms powering decentralized finance, Web3, and global payments.
The era of diversified, regulated crypto investing may be just around the corner.
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