Grayscale Digital Large Cap Fund
Grayscale Digital Large Cap Fund (Ticker: GDLC) is a financial product sponsored by Grayscale Investments that provides investors with exposure to a diversified basket of large-capitalization digital assets. The fund is structured as a publicly quoted security, aiming to reflect the value of its underlying digital asset holdings, less expenses and liabilities. [6]
Overview
The Grayscale Digital Large Cap Fund was created to offer a simplified and secure way for investors to gain exposure to the large-cap segment of the digital asset market without the complexities of directly purchasing, storing, and safekeeping the assets. The fund initially operates as a private placement, available exclusively to accredited investors. After a statutory holding period, shares may become eligible for public quotation on the OTC Markets, allowing them to be traded through traditional brokerage accounts. This structure, however, has historically led to significant deviations between the fund's market price and the Net Asset Value (NAV) of its underlying assets. [6]
In September 2025, the fund received approval from the U.S. Securities and Exchange Commission (SEC) for listing and trading under new generic standards. This approval was part of a broader SEC decision to streamline the listing process for spot commodity-backed funds, positioning GDLC as the first multi-asset crypto Exchange-Traded Product (ETP) of its kind in the market. This development was a significant milestone for the fund and the broader digital asset investment landscape. The fund's portfolio composition is determined by the CoinDesk 5 Index (CD5), a market capitalization-weighted index that tracks the performance of the largest and most liquid digital assets. The fund's objective is to have its shares' value track the CD5 index, providing a benchmark for its performance. [7] [3] [8]
History
The Grayscale Digital Large Cap Fund was launched on February 1, 2018, as a private investment vehicle. On November 22, 2019, its shares became publicly quoted for the first time, making it accessible to a wider range of investors through the secondary market on OTC Markets. A significant change in its investment strategy occurred on July 1, 2022, when the fund began tracking the CoinDesk 5 Index to determine its portfolio composition. [6]
A pivotal moment in the fund's history occurred on September 17, 2025, when it was approved for trading as a multi-crypto asset ETP under new listing standards established by the SEC. This regulatory green light was part of a landmark decision that also streamlined the approval process for future crypto ETPs. The U.S. SEC officially approved the listing and trading of the fund on September 18, 2025. This regulatory approval was a key achievement, with Grayscale's Peter Mintzberg stating the team was “working expeditiously to bring the FIRST multi crypto asset ETP to market.” The approval marked a new phase for the fund, enhancing its structure and potential market accessibility. [7] [3] [8]
Technology and Structure
Investment Structure
The fund operates under a unique two-stage structure. Initially, it is offered through private placements to accredited investors under Rule 506(c) of the Securities Act of 1933. These shares are restricted and cannot be publicly traded for an initial period. Following this holding period, eligible shares can be sold on the secondary market, with GDLC being quoted on the OTC Markets. This structure allows investors to buy and sell shares through standard brokerage accounts. However, because the fund historically lacked a share creation and redemption mechanism common to traditional ETFs, its market price could trade at a significant premium or discount to its Net Asset Value (NAV). [6]
Underlying Index
Since July 1, 2022, the fund's holdings are based on the CoinDesk 5 Index (CD5). This index is designed and managed by CoinDesk Indices, Inc., and measures the market capitalization-weighted performance of a select group of the largest and most liquid digital assets. The use of a third-party index provides a transparent and rules-based methodology for the selection and weighting of the assets held within the fund's portfolio. [6] [3]
Fund Composition and Holdings
As of September 17, 2025, the Grayscale Digital Large Cap Fund held a portfolio of five digital assets. The composition is weighted by market capitalization according to the rules of the CoinDesk 5 Index.
Financials and Performance
The fund has a total expense ratio of 2.50%. As of September 17, 2025, the fund's key financial metrics were reported as follows:
- Assets Under Management (AUM): $915,586,220.38
- Shares Outstanding: 15,867,400
- Net Asset Value (NAV) per Share: $57.70
- Market Price per Share: $54.29
The performance data as of August 2025 shows the returns based on both the market price of the shares and the NAV of the underlying assets.
Risks and Disclosures
Grayscale provides several key disclosures regarding the risks associated with investing in the GDLC fund. A primary disclosure states that the fund has not historically met its investment objective. The official documentation notes: "To date, the Product has not met its investment objective and the Shares of the Product quoted on OTC Markets Group has not reflected the value of digital assets held by the Product... but instead have traded at both premiums and discounts to such value, with variations that have at times been substantial." [6]
This discrepancy between market price and NAV is a significant risk, largely attributed to the fund's structure, which lacks a conventional redemption mechanism to align the two values. Additional risks include the inherent volatility of digital assets, the evolving regulatory landscape, the concentration of ownership in some underlying assets, and the fund's reliance on third-party custodians for asset safekeeping. [6]
Regulatory Status
The Grayscale Digital Large Cap Fund is not registered under the Investment Company Act of 1940. Its shares are offered in private placements pursuant to Rule 506(c) of the Securities Act of 1933, which limits initial participation to accredited investors. The shares sold in these private placements are considered "restricted securities" and are subject to limitations on resale. [6]
On September 17, 2025, the U.S. Securities and Exchange Commission (SEC) approved a set of generic listing standards that allow exchanges to list ETPs holding spot commodities, including cryptocurrencies, without requiring the agency's individual review for each product. This decision streamlines the path to market by enabling exchanges to list qualified ETFs without undergoing the often-lengthy 19(b) rule filing process, which could take up to 240 days. Under the new framework, if an issuer's proposed fund meets the generic listing standard, the exchange can proceed with listing it directly. SEC Chairman Paul Atkins stated the decision was aimed at reducing barriers to digital asset products, saying, "By approving these generic listing standards, we are ensuring that our capital markets remain the best place in the world to engage in the cutting-edge innovation of digital assets." [8]
Following this rule change, the SEC approved the listing and trading of the Grayscale Digital Large Cap Fund on September 18, 2025, a decision that also included options tied to the fund. This approval allowed GDLC to be traded as an ETP, marking it as the first multi-asset crypto ETP containing its specific portfolio of Bitcoin, Ethereum, XRP, Solana, and Cardano to receive such approval. The move was widely seen as a major step forward for altcoin ETFs. James Seyffart, an ETF research analyst at Bloomberg Intelligence, commented, "This is the crypto ETP framework we've been waiting for. Get ready for a wave of spot crypto ETP launches in coming weeks and months." Kristin Smith, President of the Solana Policy Institute, added that the new standards are a "net-positive for U.S. investors, markets, and digital asset innovation." [3] [7] [8]