Prompted by consumer demand Charles Schwab submits an application for Crypto Economy ETF
Schwab’s crypto ETF would invest in companies that are part of its Crypto Economy Index, providing investors with indirect access to digital assets via investments in companies that deal in crypto.
Charles Schwab, the multinational financial services company, has filed with the Securities and Exchange Commission (SEC) to develop a Crypto Economy ETF in response to customer demand.
This submission comes less than a week after Jonathan Craig, Schwab’s head of investor services, told news outlet Financial Advisor IQ that one in every six Schwab customers showed an interest in crypto investments. As he stated:
“In the first half of the year, a whole 16% of Schwab’s customers want to invest in cryptocurrencies.” The proposed Exchange-Traded Fund (ETF) seeks to replicate the performance of an index that provides “global exposure to enterprises that may profit from the creation or use of cryptocurrencies and other digital assets.”
According to the official registration, the ETF will track the Schwab Crypto Economy Index and invest “at least 80% of its net assets” in equities of firms that use Bitcoin (BTC) “and other digital assets.”
An ETF enables investors to bet on the value of a portfolio of assets without having to physically own or own them. According to the filing, Schwab’s Crypto Economy ETF will not invest directly in cryptocurrency or initial coin offers (ICO). It would, however, invest in cryptocurrency-related businesses:
“The fund may have an indirect exposure to cryptocurrencies via its investments in firms that either employ one or more digital assets in their business operations or hold digital assets as proprietary investments.”
Schwab has filed for a crypto ETF, joining competing financial firm Blackrock. On Jan. 22, Blackrock, the world’s biggest asset manager with $10 trillion in assets under management (AUM), filed for bankruptcy. Additionally, its iShares Blockchain and Technology ETF would invest in the equities of firms using blockchain and cryptocurrency that are included in the New York Stock Exchange’s Factset Global Blockchain Technologies Index.
For American investors, there are presently eight crypto or blockchain-related ETFs available from Bitwise, Global X, Siren, and Amplify, as well as two from First Trust, VanEck, and Capital Link. These funds together handle $1.7 billion in assets.