Why the SEC Paused Grayscale ETF Approval at the Last Minute

Crypto Market on Edge as SEC Pauses Grayscale ETF Approval

The New York Stock Exchange has been informed by the SEC that it will examine the Division of Trading and Markets' July 1 decision to authorize GDLC shares to be listed on NYSE Arca in accordance with Rule 431. Until the Commission takes additional action, the Grayscale ETF Approval is halted.

Source : https://www.sec.gov/files/rules/sro/nysearca/2025/sr-nysearca-2024-87-rule-431-letter-2025-07-01.pdf

According to the Securities and Exchange Commission , more investigation is required. Furthermore, a number of cryptocurrency proposals that contain assets like Solana (SOL), XRP, and Dogecoin (DOGE) are presently being examined by the SEC. Together, these coins make up less than 10% of the portfolio. None, nevertheless, currently have an SEC-approved spot Exchange Traded Fund.

GDLC Fund Tracks Market-Cap Weighted Crypto Portfolio

The Grayscale ETF Approval includes GDLC Fund. It is an attempt by organisation to provide investors with a variety of investment opportunities within a regulated fund structure. It monitors a market-cap-weighted basket of the best digital assets. With a portfolio that included Bitcoin, Ethereum, XRP, Solana, and Cardano, the firm managed assets totaling about $755 million as of July 1. The SEC had previously expedited the Grayscale ETF Approval plan to turn another closed-end fund into an ETF on July 2. Bitcoin and Ethereum make up the majority of this fund roughly 80% and 11%, respectively, with minor percentages in Solana, Cardano, and XRP. Qualified investors can already trade the fund on the over-the-counter market. According to earlier reports, an amendment to turn the GDLC pool into an Exchange Traded Fund was authorized by the SEC.

High Fees and Legacy Structure: Grayscale’s Bitcoin Trust in Focus

Company's crypto trusts' lock-up duration and the dearth of in-kind redemptions were the main causes of these spread windows. Since organisation started transforming its private digital asset trusts into ETFs, however, arbitrage opportunities have decreased. By offering investors access to digital assets without the technical hassles of directly holding cryptocurrency, company is a pioneer in the development of cryptocurrency investment vehicles. As the business matures and an era comes to an end, its crypto trusts are being converted into exchange-traded funds. With an expense ratio of 1.5%, the company's Bitcoin trust is currently the most costly Bitcoin ETFs available and the highest-grossing BTC investment instrument.

Regulatory Pause Highlights Complexities of Multi-Asset Crypto ETFs

The decision to pause Grayscale ETF Approval conversion highlights the ongoing complexities of aligning digital asset products with traditional regulatory frameworks. The SEC hitting pause on Grayscale ETF Approval shows they’re still cautious about broad crypto exposure. The Securities and Exchange Commission clarified regulatory ambiguity on July 1st by issuing guidance for users of cryptocurrency ETPs . The function of cryptocurrency issuers and the data they need to include in their filings are described in the SEC's official notice this could be the reasons for pending Grayscale ETF Approval . Bitcoin ETFs may have opened the door, but full scale approval for diversified digital funds is clearly a slower, more scrutinized process. The SEC's move could signal tighter oversight, but it might also delay innovation. This could be a net positive if the "further examination is necessary" as stated by the SEC is for due diligence that expedites the wave of crypto ETFs pending approval. Let’s hope for clarity soon, crypto markets need stability!