SEC Puts GDLC ETF Conversion on Hold

On July 1, 2025, the SEC's Division of Trading and Markets approved Grayscale’s application to convert the Digital Large Cap Fund (GDLC) into a spot ETF. Yet, just 24 hours later, the full commission issued a stay order under Rule 431(e), effectively pausing the conversion until further notice .

Why the Sudden Pause?

1. Awaiting a Unified Framework

Analysts suggest the SEC is delaying token-based ETFs that were approved via the 19b‑4 process until a comprehensive regulatory framework for digital asset funds is in place .

2. Internal Divisions

Approval by one internal division appears to have triggered pushback from another, leading to the stay—possibly due to concerns over the GDLC’s structure or inclusion of altcoins .

What’s Inside GDLC?

The fund holds a diversified mix of top cryptocurrencies:

Bitcoin: ~80%

Ethereum: ~11–12%

XRP, Solana, Cardano: Combined ~8–9%

GDLC would have been one of the first multi-asset spot ETFs in the U.S., offering exposure beyond Bitcoin and Ethereum .

Implications Moving Forward

Delayed Market Timeline

No launch date is set. The launch is pending SEC guidance on listing standards and digital asset frameworks .

Altcoin ETF Rollout Strategy

The SEC may first issue rules covering altcoin ETFs like Solana, XRP, and Cardano before approving multi-asset funds .

Positive Outlook Remains

Despite the setback, analysts like James Seyffart and Eric Balchunas still expect altcoin ETFs will eventually be approved—possibly by late 2025 .

Summary Table

Aspect Status / Insight

GDLC Conversion Initially approved (July 1), paused (July 2)

Main Concern Lack of a unified crypto ETF framework

Asset Allocation BTC (~80%) + ETH (~11%) + XRP, SOL, ADA

Regulatory Outlook Multi-asset altcoin ETFs likely awaiting broader standards

Market Anticipation Delayed, but approval still expected by late 2025

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