Invesco Ltd., a major operator of exchange-traded funds in the U.S., is preparing to launch a suite of exchange-traded funds (ETFs) backed by cryptocurrencies.
Invesco, an investment management firm based in Atlanta, is partnering with Mike Novogratz’s Galaxy Digital Holdings Ltd. to rollout U.S.-listed ETFs that hold and track the performance of Bitcoin and other cryptocurrencies that trade like stocks.
The Atlanta-based asset manager wants to capitalize on the consumers’ rising interest in digital assets. One of the first crypto ETFs that Invesco plans to launch under the partnership is Bitcoin-backed ETF, which Galaxy initially proposed in April.
Invesco, which manages $1.5 trillion in assets globally, including about $470 billion in indexed strategies and ETFs, disclosed the partnership on Wednesday, September 22.
Galaxy, which has $2.1 billion in assets under management, had filed for a US ETF that would invest directly in Bitcoin in April. But on Tuesday, September 21, Galaxy revised the ETF’s filing with the SEC to make Invesco the sponsor for the proposed fund.
Jn June, Invesco had filed with the SEC to launch a Crypto Economy ETF that seeks to invest mainly in cryptocurrency firms and up to 10% in Bitcoin futures. The planned fund intends to track the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Index.
Last month, Invesco also filed with the SEC to bring to market a Bitcoin strategy offering that would invest most or all of its assets in Bitcoin futures contracts traded on the CME (Chicago Mercantile Exchange).
John Hoffman, head of Americas, ETFs and indexed strategies at Invesco, talked about the partnership with Galaxy and said: “When we partner, we always look to work with best in class, subject matter experts, and Galaxy has to experience across all verticals of digital assets. We are aligned on a common vision, and most importantly, a path focused on education to help investors safely navigate this new technology.”
Sumit Roy, a crypto editor and analyst of ETF.com, also talked about the partnership. Roy said that if the SEC approves the deal, then Invesco and Galaxy will launch products tied to all of the most cryptocurrencies – Bitcoin, ether, Solana, etc., as well as index products.
Meanwhile, Galaxy CEO Mike Novogratz stated on Wednesday during the Mainnet 2021 conference in New York that he is unsure when SEC chairman Gary Gensler will decide to approve the EFTs. Still, he said that there would be equity EFTs with all different public stocks and other products when the SEC will give the greenlights.
Race to Launch Bitcoin ETFs
Invesco is partnering with Galaxy to create a suite of physically-backed digital assets ETFs amid the current regulatory uncertainty around such products in the U.S.
The development is resurfacing when the US SEC approves an ETF to hold digital assets and track their price tags.
It has been eight years since the Winklevoss twins first attempted to obtain approval with the SEC for a Bitcoin ETF.
More than 18 asset management firms have jumped abroad with their filings this year, but the U.S. securities regulator has approved none. And it is unlikely that a physical Bitcoin ETF will be approved this year.
However, SEC boss Gary Gensler recently signalled that he would be more open to considering a futures-based Bitcoin ETF under strict rules.
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