NYSE American’s daring pursuit of SEC approval to broaden crypto derivatives through Grayscale GDLC ETF options
NYSE American has filed a Section 19(b)(1) application with the SEC to list options on Grayscale’s Digital Large‑Cap Fund (GDLC). The move follows the 2024 spot‑Bitcoin ETF approvals and aims to merge crypto exposure with traditional derivatives. The filing initiates a 45‑day public comment period and must meet anti‑fraud and fair‑trade requirements. GDLC holds a diversified basket—≈75% Bitcoin, 16% Ethereum, and smaller positions in XRP, Solana and Cardano—rebalanced quarterly. Options are viewed as the next evolution in a market that has expanded rapidly since 2020, providing hedging and income tools absent from spot trading. Growing institutional demand for regulated crypto products is driving the push for such instruments. Approved options would let pension funds, insurers and other large investors use collars, protective puts and covered‑call strategies on crypto exposure. This could boost GDLC’s assets under management, currently about $600 million, and attract additional capital. Market makers would supply liquidity via delta‑hedging, improving spot‑market depth and efficiency. The SEC will assess investor protection, volatility effects and systemic risk, applying position limits, reporting and surveillance similar to commodity‑ETF options. The Options Clearing Corporation would guarantee contracts, lowering counterparty risk. Approval would signal confidence in crypto derivatives while imposing safeguards against manipulation.
