Grayscale Wins Approval for First Public Digital Currency Index Fund
Updated: Oct 17, 2019
Grayscale Investments has been given regulatory approval to list what it calls the first publicly-traded digital currency index fund.
Grayscale announced that the Financial Industry Regulatory Authority (FINRA) has green lit the shares of Grayscale’s Digital Large Cap Fund (DLC).
Grayscale claims to be the world’s largest cryptocurrency asset manager, and has operated the DLC since the beginning of 2018.
This investment vehicle allows institutional clients to gain exposure to the price movements of several cryptocurrency assets without the risk of holding private keys and holding the assets directly.
The approval starts a one-year cooling off period during which, under US securities law, the DLC shares will not be publicly tradable. Grayscale said:
There will be no trading volume in the Shares’ public quotation until the Shares are DTC eligible, which GDLC is expected to receive soon. Investors will be able to buy and sell freely-tradable DLC shares through their investment accounts in the same manner as they would other unregistered securities
The shares of the DLC will trade under symbol 'GDLCF' on OTC (over-the-counter) markets, which Grayscale claims is a first in the U.S.
Grayscale is a subsidiary of major crypto venture capital company Digital Currency Group. Grayscale’s Bitcoin Investment Trust, allegedly the only Bitcoin investment trust in the U.S., reportedly surged 300% this year as of July, with sales having doubled in Q2 of 2019.
In Australia, a publicly-traded digital currency index fund is commonly referred to as an 'exchange-traded fund', which are designed to track the performance of a particular index, such as the ASX200, or a specific commodity or asset. At this stage, there are currently no cryptocurrency ETFs listed on the Australian Securities Exchange (ASX), however, Grayscale's approval may provide an example for an Australian ETF provider to follow suit.