GDLC: More Than 80% Bitcoin

Summary GDLC’s NAV discount has compressed to 10%, trading at par based on my ‘adjusted NAV’ framework, reflecting BTC and ETH weightings. With an 80% Bitcoin allocation, GDLC may not be ideal for altcoin rallies, despite potential spot ETF approvals for XRP and SOL. The fund’s heavy BTC exposure challenges its effectiveness for altcoin-focused investors; single-asset ETFs may offer better returns. GDLC remains a ‘hold’ for passive investors, but active altcoin buyers should consider alternative funds for more direct exposure. It has been approximately five months since my last Seeking Alpha article covering the Grayscale Digital Large Cap Fund (GDLC). It’s a fund that I’ve covered a half dozen times going back to 2022 and one that I’ve often provided readers with an ‘adjusted NAV’ valuation based on my own framework. From November: For those who have not seen the prior work, my ‘fair value’ calculation zeroes out the altcoins after BTC and ETH and assigns a full valuation to the BTC and ETH in the fund. With the increasing likelihood that more spot ETFs for altcoins may enter the market this year, GDLC’s NAV rate discount has further compressed down to just 10% from the 17% discount offered by the market back in November. More importantly, based on my ‘adjusted NAV’ framework, the fund essentially trades at par given current weightings to readily available spot ETFs for digital assets in the US market. In this update, we’ll look at the current makeup of the fund and assess if GDLC is the right way to pay a potential ‘alt season’ in the digital asset market. Current Holdings & Discount Rate Asset Allocation Assets/Share Weight Bitcoin ( BTC-USD ) 0.00036456 80.60% Ethereum ( ETH-USD ) 0.00221657 9.37% XRP ( XRP-USD ) 1.06819845 5.61% Solana ( SOL-USD ) 0.00939617 3.33% Cardano ( ADA-USD ) 0.66104994 1.09% Source: Grayscale, as of 4/23/25 As has been the case since I’ve been covering GDLC, the largest allocation of the fund’s capital is to Bitcoin. This was actually my original critique when I first covered the fund; mainly, that a product that aimed for digital asset diversification having such a large BTC weighting perhaps defeated the purpose of buying an ‘altcoin’ fund. Though it should be noted that this allocation to Bitcoin has almost certainly helped the fund’s NAV rate discount compression since ‘crypto winter’ back in 2022. Currently, that discount stands at just over 10%: ASSETS UNDER MANAGEMENT $670,308,275.58 SHARES OUTSTANDING 15,867,400 NET ASSET VALUE PER SHARE $42.24 MARKET PRICE $37.89 DISCOUNT TO NET ASSET VALUE 10.30% Source: Grayscale, as of 4/23/25 If readers think back to my framework for creating the ‘adjusted NAV’ of GDLC, the combined 90% allocation to Bitcoin and Ethereum essentially puts the fund at my adjusted ‘fair value’ already. However, with the US political landscape changing from crypto-antagonism to one that is as more open to the asset class, should this fund trade closer to the real NAV rather than my adjusted NAV? There is certainly an argument to made that it perhaps should. But the next question I have about GDLC in 2025 is pretty simple; is this fund the right way to play a potential rally in the altcoin market? I’m much less certain that the answer to that question is ‘yes’ given how exposed the fund is to BTC. Bitcoin Allocation & Altcoin Exposure As far as I can tell, Grayscale no longer offers a historic breakout of GDLC holdings data by day. Thus, to assess the long-term Bitcoin allocation that has historically been represented by each GDLC share, I’ve referenced my prior articles. That data is shown in the table below, with dates hyperlinked to the source articles: Historic Weightings BTC % ETH % Remaining % Total Holdings August 2022 63.50% 31.20% 5.30% 5 June 2023 70.32% 27.05% 2.63% 5 August 2023 69.97% 26.97% 3.06% 5 March 2024 69.33% 22.39% 8.28% 6 September 2024 75.80% 17.80% 6.40% 5 November 2024 75.50% 16.30% 8.20% 5 April 2025 80.60% 9.37% 10.03% 5 Source: Grayscale, prior articles Not only is the current 80.6% allocation to Bitcoin the largest BTC weighting since I’ve been covering GDLC, but the 10% exposure to alternative coins is the largest that I can recall. This is no doubt due, in part, to the performance of coins like XRP and SOL. But I think it also speaks to the significant under-performance of ETH; which has fallen in fund weighting by 70% in less than 3 years. ETF Analyst Expectations as of 2/10/25 (James Seyffart/X) I shared this graphic in a prior Grayscale piece and I think it’s useful for GDLC as well. Bloomberg’s ETF analysts have a positive outlook on ETF approval odds for both XRP and SOL. If that does indeed come to fruition, it would mean ADA is the only cryptocurrency in GDLC that doesn’t have a spot ETF in the US market. At just 1% of AUM allocated to ADA currently, it could easily be argued that GDLC should trade essentially at NAV or slightly lower. Even in that scenario, the re-rating for GDLC as a result of XRP and SOL spot ETF approvals would be closer to 8 or 9% higher coin prices being equal. At that point, the merits of the fund itself would likely be the biggest driver of future GDLC returns. Bitcoin Dominance (CoinMarketCap) In a market that has increasingly become dominated by Bitcoin over the last two and half years, the merits of a fund like GDLC likely become challenged. On one hand, Bitcoin’s surge to 63% of the total crypto market is perhaps a signal that a turnaround for altcoins is warranted based on historical trends. On the other hand, with just 20% combined allocation to ETH and other alts, GDLC might not actually be the best way to play a reversal in BTC dominance. Closing Thoughts I don’t think 80% allocation to Bitcoin is what altcoin buyers would be interested in if nearly the entire fund could be replaced with allocation to four single-asset spot ETFs at an individual investor’s own discretion. For a ‘set it and forget it’ type of fund that could benefit from higher crypto prices, GDLC probably works fine. Especially given what is still a real NAV discount of 10%. But if BTC begins to lose market share to ETH, SOL, XRP, or ADA, the returns from GDLC will ultimately lag more direct exposure to those assets through alternative funds. There are several spot ETH ETFs already. Though it trades at a dwindling premium, Solana bulls have the Grayscale Solana Trust ( GSOL ) as an option. Ripple bulls could look to something like the Teucrium 2x Long Daily XRP ETF ( XXRP ) for shorter term trading. And this is before spot ETFs enter the market – which is a catalyst that could manifest this year. Given all this, I’m reiterating GDLC as a ‘hold’ and suspect that altcoin buyers will likely do better piecing together an altcoin portfolio using single-asset funds and lower-cost ETFs.

Source: Seeking Alpha