Grayscale’s GDLC Debut Marks Start of New Era for Crypto ETPs
SEC clears path for faster crypto approvals as multi-asset funds hit Wall Street
Welcome to the Friday edition of the Crypto In America newsletter!
What you’ll read: Grayscale kicks off crypto ETP season, former SEC chair Gensler stands by his crypto record, and the week’s biggest stories.
Crypto ETP season is set to officially kick off today with the debut of Grayscale’s CoinDesk Crypto 5 ETF (GDLC) on NYSE Arca.
The first multi-asset crypto fund of its kind, GDLC will give investors exposure to the five largest cryptocurrencies by market cap: Bitcoin, Ether, XRP, Solana, and Cardano.
The SEC approved the fund on Wednesday along with a new generic listing standard meant to speed up approvals for crypto spot ETPs. For products that meet the requirements, national exchanges will no longer need to file a 19b-4 form for each listing.
Experts say the new standard will allow products to come to market more quickly and could open the door to a wave of crypto ETPs.
"The last time they implemented a generic listings standard for ETFs, launches tripled," Bloomberg Senior ETF Analyst Eric Balchunas said on X. "Good chance we see north of 100 crypto ETFs launched in the next 12mo."
Supporters argue the move could finally put digital assets on par with other financial products on Wall Street, something previous SEC commissions resisted for years.
“The SEC is not a merit regulator,” said Greg Xethalis, General Counsel of MultiCoin Capital. “For most of the last 8 years, prior Commissions used the 19b-4 as a backdoor to merit regulation for product wrappers that are well developed and understood, even if the underlying asset might seem new. As shown by the Bitcoin ETP launch, the market wants this product option and this latest move both heeds that call and is a welcome return to normal course at the Commission.”
In addition to GDLC, the SEC is reportedly days away from approving Bitwise’s BITW, an index fund of the top ten cryptocurrencies by weighted market cap.
Next month, investors will be watching closely to see whether the SEC greenlights a wave of individual spot crypto ETPs, including Ethereum Staking, Litecoin, Solana, XRP, and Dogecoin.
Gensler’s ‘Sorry, Not Sorry’
Former SEC chief Gary Gensler told CNBC’s Sara Eisen he has zero regrets about his stint as Wall Street’s top cop, even as she pointed out the agency is tearing down his policies at warp speed and the crypto crowd is “ecstatic” he’s finally out of the building.
“I’m very proud of what we accomplished,” Gensler said. “I took an oath of office. I also ran a law enforcement agency, and we were consistently trying to ensure investor protection.”
He didn’t bat an eye when Eisen and co-host Carl Quintanilla pointed out that under Paul Atkins, crypto in the U.S. is suddenly swimming in innovation, leadership, and capital. Gensler shrugged off the praise for his successor, insisting that most of the sector, besides Bitcoin, is still riding the rollercoaster of hype, untethered from fundamentals, and highly speculative.
After leaving the SEC in January, Gensler returned to MIT, where he serves as Professor of the Practice in Global Economics and Management, teaching and researching AI, fintech, and public policy.
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Weekly Recap
ICYMI. Here are the biggest news stories this week from the intersection of Washington and Web3:
The Federal Reserve cut interest rates by a quarter point to a new range of 4%-4.25%.
Senate Banking Committee leadership held a closed-door meeting with industry leaders to discuss the latest market structure draft. Representatives from Ripple, Coinbase, Multicoin, a16z, Circle, Paradigm, Kraken, and Cardano attended.
The SEC approved generic listing standards for commodity-based and crypto ETPs and also cleared Grayscale’s Digital Large Cap Fund to begin trading.
A new super PAC called the Fellowship PAC, aiming to rival Fairshake, launched with more than $100 million committed to backing pro-crypto and pro-America candidates. It is currently unclear who is behind the initiative.
The House voted to retroactively combine the Anti-CBDC Surveillance State Act into the CLARITY Act ahead of sending the bill up to the Senate.
Prominent figures in the Bitcoin community met with lawmakers about supporting a strategic Bitcoin reserve and legislation that would require the U.S. government to acquire one million Bitcoin over five years.
PayPal will integrate Bitcoin & Ethereum into its new peer-to-peer payment system.
Google announced it will collaborate with Coinbase to add crypto payments to its new AI payments protocol.
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It's been a good week overall.