Invesco has recently launched two new ETFs based on crypto companies.
They are called Invesco Alerian Galaxy Crypto Economy (SATO, in honour of Satoshi Nakamoto) and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce (BLKC).
Summary
SATO and BLCK the new crypto ETFs from an innovative partnership
Trading began yesterday, as Bloomberg reports, on Cboe Global Markets.
These are two ETFs created through a partnership with crypto billionaire Mike Novogratz‘s Galaxy Digital Holdings, are passively managed and rebalanced monthly.
SATO has a portfolio that is 80% dedicated to companies that derive more than 50% of their performance from cryptocurrency-related activities. Portfolio that includes mining farms, crypto infrastructure builders and cryptocurrency buying companies.
BLKC invests largely in the same companies, but additionally includes companies engaged in the development of products based on blockchain technology.
Both funds hold 15% of their holdings in shares of Grayscale Bitcoin Trust.
Invesco’s head of Americas, ETFs and indexed strategies, John Hoffman, said:
“We’re starting to see the financialization of this space as the next network effect”.
These are not the first two ETFs based on crypto companies, but the US market is especially looking forward to SEC approval of ETFs that directly replicate the price of BTC.
ETFs and SEC recognition of existing frameworks
According to Hoffman, it’s only a matter of time before the SEC approves one. And Mike Novogratz, who is involved in one of the proposed ETFs based on bitcoin futures, was also optimistic that something reasonable will come of it.
Speaking about the recent approval of the Volt Bitcoin Revolution ETF, the CRO of pan-European securitized derivatives trading venue Spectrum Markets, Alpay Soytürk, said that “We are witnessing a watershed moment that will open the door to further innovation in the space”. Seeing that in fact the SEC has recognized that existing frameworks can already be used to provide investors with regulated products for crypto markets.
He added:
“Longer term, our view continues to be that current regulatory definitions need to be updated, and their scope expanded, to more comprehensively cover the complexities and idiosyncrasies of cryptocurrency, if it is to realise its potential as a more mainstream asset class. But for now, this is a very positive step in the right direction, that sees regulators and the financial community come together to meet the ever-growing investor demand for secure and effective ways of investing in cryptocurrencies. Clear, consistent and effective regulation will be the pillars on which the next chapter of the cryptocurrency story are built”.
