Grayscale Receives Regulatory Clearance from FINRA to Offer Publicly-Traded Digital Currency Fund

New York-based Grayscale Investments has obtained regulatory approval from the Financial Industry Regulatory Authority (FINRA) to list the first publicly-traded digital currency index fund.

According to a press release, the company’s Digital Large Cap Fund (DLC) will be listed on over-the-counter (OTC) markets and trade under the ticker GDLCF. 

In addition to DLC, Grayscale offers the Bitcoin Trust (OTCQX: GBTC), Ethereum Trust (OTCQX: ETHE), and Ethereum Classic Trust (OTCQX: ETCG). The company says it’s planning to list all of its crypto investment products on the public market. 

Grayscale’s products are open to accredited investors. DLC is only available to investors that can access US financial securities. 

The DLC gives investors broad-based exposure to crypto-assets. The fund has provided a year-to-date return of 74.8%.

The DLC gives investors exposure to the largest digital assets based on market capitalization. The fund targets more than 70% of the cryptocurrency market, which includes Bitcoin (BTC), Ether (ETH), XRP, Bitcoin Cash (BCH), and Litecoin (LTC). 

The fund adjusts to changes in crypto market prices by rebalancing itself every quarter. This allows underperforming assets to be removed while also adding digital assets that are performing well. The fund is a passive investment vehicle, as it’s not actively managed.

Other factors including liquidity, operational requirements, and the availability of custodial solutions are evaluated when selecting crypto assets for the new fund.

A subsidiary of the Digital Currency Group, Grayscale is the oldest and largest digital asset manager with more than $2.2 billion of assets under management. The company began offering its products to accredited investors in Feb 2018. There were around 3.2 million outstanding DLC shares as of September 30, 2019.

Investors can acquire shares in the private placement investment vehicle, which is backed by digital currency. The valuation is made at 4:00 PM EST each day and is based on TradeBlock’s Digital Asset Reference Rate.

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