Grayscale Investments has taken another major step toward expanding access to cryptocurrency investments.
The firm has officially filed an S-3 registration statement with the US Securities and Exchange Commission (SEC) to convert its Digital Large Cap Fund (DLC Fund) into an exchange-traded fund (ETF).
This move, announced in a filing on 1 April, is part of Grayscale’s broader strategy to bring regulated cryptocurrency investment products to a wider audience.
The DLC Fund was initially launched in 2018 as a private investment vehicle available only to accredited investors through private placements. It holds a diversified portfolio of leading digital assets, including Bitcoin ($BTC), Ethereum ($ETH), XRP ($XRP), Solana ($SOL), and Cardano ($ADA).
If approved, this conversion would allow everyday investors to gain exposure to multiple cryptocurrencies through a traditional stock exchange, making it easier for them to invest in digital assets without needing to directly purchase and store cryptocurrencies themselves.
According to Grayscale, the Digital Large Cap Fund has performed significantly well over the years. Since its inception, the fund has surged by approximately 479%, demonstrating the increasing demand for diversified crypto investment options.
As of 31 March, the fund managed around $606 million in assets under management. Bitcoin remains the dominant asset in the fund, making up about 79.4% of its holdings, while Ethereum accounts for 10.69%, XRP for 5.85%, Solana for 2.92%, and Cardano for 1.14%.
In January, the fund underwent an index rebalancing, resulting in the removal of Avalanche ($AVAX) and the inclusion of Cardano to ensure the holdings remained aligned with the updated index composition.
If the SEC grants approval, the proposed ETF will maintain similar asset allocations, providing investors with a way to gain diversified exposure to leading cryptocurrencies without directly holding them.
This move is in line with Grayscale’s broader goal of integrating crypto into mainstream financial markets, ensuring digital asset investments become more accessible and regulated.
Grayscale’s expanding crypto ETF offerings
Grayscale has been at the forefront of advocating for cryptocurrency ETFs, and its latest filing is part of a larger effort to establish regulated crypto investment products.
The company has already played a crucial role in bringing spot Bitcoin ETFs to the market following their historic approval in January 2024.
Shortly after, Ethereum ETFs received regulatory approval, marking another milestone in institutional cryptocurrency adoption.
Beyond its DLC Fund ETF filing, Grayscale is aggressively expanding its crypto ETF offerings. The firm recently submitted an application for an Avalanche ($AVAX) ETF, with Nasdaq filing a corresponding 19b-4 form to the SEC.
Additionally, the firm has applied for a Hedera ($HBAR) ETF, signaling its continued commitment to offering investors regulated access to a broad range of digital assets.
Grayscale has positioned itself as a leader in the institutional adoption of cryptocurrencies. The company believes that introducing ETFs for multiple digital assets will help bring more legitimacy to the industry and provide investors with safer, regulated investment vehicles.
A Grayscale spokesperson commented on the firm’s latest moves, stating, “The goal is to provide investors with easier access to crypto assets through regulated products”.
The Digital Large Cap Fund ETF, if approved, could provide a straightforward way for investors to gain exposure to a diversified basket of cryptocurrencies. The fund currently represents about 75% of the total digital asset market capitalization, excluding meme coins and stablecoins.
This broad exposure makes it an appealing option for investors who want to participate in the growth of the crypto sector without having to manage individual assets themselves.
Grayscale’s ambitions extend beyond just Bitcoin and Ethereum ETFs. The company is actively seeking approval for several other cryptocurrency ETFs, including those tied to XRP, Cardano, Litecoin ($LTC), Solana, Dogecoin ($DOGE), Polkadot ($DOT), and Avalanche.
Bloomberg analysts believe that among these, Litecoin ETFs have the highest likelihood of approval, followed by Dogecoin, Solana, and XRP.
Ethereum faces challenges as Bitcoin strengthens
While Grayscale continues its ETF expansion, the broader cryptocurrency market is experiencing shifting trends. One of the most notable developments is Ethereum’s ongoing struggle against Bitcoin.
The ETH/BTC ratio has fallen to its lowest point since 2020, raising concerns about Ethereum’s position within the cryptocurrency ecosystem.
As of early 2025, Ethereum has significantly underperformed Bitcoin. Since the beginning of the year, Ethereum has dropped by 46%, whereas Bitcoin has only declined by 12%.
This growing gap between the two leading cryptocurrencies has caught the attention of investors and analysts alike, as many had expected Ethereum to perform better given its technological advancements and ongoing upgrades.
Market analysts have pointed to Bitcoin’s increasing appeal as a safe-haven asset, similar to gold, as one of the reasons for this trend. Institutional investors appear to be favouring Bitcoin over Ethereum due to its fixed supply and its reputation as a reliable store of value.
“Bitcoin’s fixed supply makes it a safer bet for large investors looking for an inflation hedge”, analysts noted in recent reports.
Ethereum’s struggles have also been influenced by technical challenges. The long-awaited Pectra upgrade, designed to improve the network’s efficiency and scalability, has encountered multiple delays.
Early test runs faced difficulties before the eventual rollout of the Hoodi testnet. These technical setbacks have contributed to market uncertainty, with investors questioning whether Ethereum can maintain its position as the second-largest cryptocurrency.
Another ongoing issue is Ethereum’s high transaction fees, commonly referred to as “gas fees”. Despite the network’s transition to a proof-of-stake system, users continue to face high costs, making other blockchain networks like Solana and Avalanche more attractive alternatives.
Some investors are beginning to shift their focus toward these competitors, fearing that Ethereum’s long-term growth potential could be hindered if these issues persist.
Despite Ethereum’s recent struggles, some analysts remain optimistic about its future. If the Pectra upgrade is successfully implemented and Ethereum’s network becomes more efficient, the cryptocurrency could experience a strong recovery.
Some predictions suggest that Ethereum could reach as high as $20,000 under favourable market conditions. However, others caution that if the cryptocurrency continues to lose ground against Bitcoin, investors may start shifting their capital into other digital assets.
The rise of cryptocurrency ETFs has been one of the most significant developments in the digital asset space over the past year.
Since the approval of spot Bitcoin ETFs in early 2024, billions of dollars have flowed into these investment vehicles, demonstrating strong institutional demand. This has set the stage for firms like Grayscale to continue pushing for further ETF approvals.
If the SEC grants approval for Grayscale’s Digital Large Cap Fund ETF, it could mark another major step toward mainstream crypto adoption.
The ETF would allow retail investors to gain exposure to multiple cryptocurrencies in a regulated and transparent manner, reducing barriers to entry for those who are hesitant to invest directly in digital assets.
Grayscale remains one of the most active firms in the crypto ETF space. The company’s ongoing efforts to introduce new ETFs tied to various cryptocurrencies reflect its long-term vision of integrating digital assets into traditional financial markets.
While the regulatory landscape remains uncertain, the increasing demand for regulated crypto products suggests that more ETF approvals could be on the horizon.
As of the latest market update, Ethereum was trading at $1,920, reflecting a 4% increase in the past 24 hours. However, analysts warn that unless Ethereum demonstrates strength in the coming weeks, Bitcoin’s dominance could continue to grow.
