TLDR
SEC stayed GDLC ETF approval one day after greenlight by Trading and Markets division.
GDLC fund holds 80% BTC, 12% ETH, and small shares of XRP, SOL, and ADA.
GDLC would be first U.S. ETF to include assets beyond BTC and ETH.
Analysts expect Solana, XRP, and Litecoin ETFs approved by end of 2025.
The U.S. Securities and Exchange Commission (SEC) has halted the conversion of Grayscale’s Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF), a day after it was approved for trading by the agency’s Division of Trading and Markets. The pause was issued through an official stay order as the commission signaled that further internal review is required.
The decision follows the fund’s initial fast-tracked approval, which would have allowed it to begin trading on public exchanges. Grayscale’s GDLC holds a portfolio consisting mostly of Bitcoin and Ethereum, with minor allocations in Solana, Cardano, and XRP.
Conversion Order Stayed by SEC Leadership
On July 2, the SEC issued a stay on the approval order for GDLC through a letter from Deputy Secretary J. Matthew DeLesDernier. The letter noted that while the Division of Trading and Markets approved the conversion on July 1, the Commission itself had not yet given full clearance.
“In accordance with Rule 431(e), the July 1, 2025 order is stayed until the Commission orders otherwise,” the letter read. The Office of the Secretary also stated it would inform the New York Stock Exchange of any future updates.
Though the fund had received initial approval, the stay places an indefinite hold on its ability to begin trading as an ETF. The reason for the pause was not detailed, and the SEC declined to comment further on individual fund decisions.
Analysts Point to Internal Coordination at SEC
Market analysts have suggested the pause may be related to the SEC’s ongoing efforts to form a consistent framework for crypto-based ETFs. Bloomberg ETF analyst James Seyffart noted that the Commission may have wanted to meet internal deadlines for responding to the application without fully approving the product for trading.
“They didn’t want to deny it outright, but also aren’t ready to approve it,” Seyffart said on Wednesday. He added that the SEC may be aligning internal positions before issuing broader guidance.
Another analyst, Eric Balchunas of Bloomberg, agreed that the delay could be procedural. He noted that the approval from one SEC division may have raised concerns in others, leading to the current stay. The pause could allow additional time to align views across departments.
Grayscale Fund Composition and Market Position
Grayscale’s GDLC fund is currently structured as a closed-end investment vehicle and is only available to accredited investors. The fund’s current composition includes about 80% Bitcoin and 12% Ethereum. Smaller holdings include 5% XRP, 3% Solana, and 1% Cardano, according to Grayscale’s website.
With this asset mix, GDLC would become the first ETF in the U.S. to offer exposure beyond Bitcoin and Ethereum. The inclusion of altcoins such as XRP, Solana, and Cardano raises questions about regulatory treatment and approval standards.
The SEC has already approved Bitcoin and Ethereum spot ETFs, but has yet to grant similar status to funds tracking other digital assets. Proposals involving Solana, XRP, Dogecoin, and others remain under review.
Future Approvals Expected by Year-End
Analysts remain confident that the SEC is moving toward broader approvals for crypto ETFs. Seyffart and Balchunas have stated they believe ETFs tied to Solana, XRP, and Litecoin have a high chance—up to 95%—of being approved before the end of 2025.
Despite the current pause, analysts expect Grayscale’s fund to eventually move forward.
“It can’t convert yet but it will,” Seyffart said. “We just don’t know when, and we don’t exactly know why the SEC issued this ‘stay’ order.”
Grayscale did not respond to requests for comment regarding the delay. The SEC also declined to elaborate on internal processes or timeline expectations.
The market is now waiting for the SEC’s next move regarding not only GDLC, but several other pending crypto ETF applications.
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