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The US Securities and Exchange Commission’s decision to postpone the launch of its Digital Large Cap Fund was deemed “unexpected” by Grayscale.

 

The company claimed that the regulator’s unexpected decision on Wednesday demonstrated the evolving nature of the regulatory environment. Grayscale stated that although this development was surprising, it illustrates how the regulatory environment around a first-of-its-kind digital asset product, such as GDLC, is dynamic and ever-changing.

The conversion of Grayscale’s GDLC fund, which focuses on Bitcoin but exposes investors to Ethereum, Solana, XRP, and Cardano, into an exchange-traded fund was expedited by the SEC. However, a note from the regulator stating that it would not yet permit the product to begin trading was also attached. Grayscale went on to say:

“We are working closely with important stakeholders to meet all requirements, and Grayscale is still committed to pursuing the listing of GDLC as an exchange-traded product. We’ll supply.

The CoinDesk 5 Index, which gauges the performance of the top five most liquid and sizable digital assets, serves as the basis for Grayscale’s Large Cap fund. Over 80% of the fund’s assets are made up of bitcoin.

According to the SEC filing, Ethereum accounts for about 11% of the ETF’s assets, followed by Solana (2.8%), XRP (4.8%), and Cardano (0%). GDLC wants to be listed on the NYSE Arca as a full-fledged ETF. The asset manager has already converted its Ethereum and Bitcoin trusts into Grayscale’s funds. Because the funds were closed-end, supply and demand imbalances resulting from their structures caused the products to trade at a premium or discount to the value of their underlying holdings.