Grayscale Launches Crypto-Focused ETF

Grayscale Investments has launched its first exchange traded fund. The Grayscale Future of Finance ETF will track the Bloomberg Grayscale Future of Finance Index.

Grayscale ETF Begins Trading 

Grayscale Investments, the world’s largest digital asset manager with over $38 billion in assets under management, has made its first foray into ETFs.

Grayscale announced the update in a Wednesday press release. The Grayscale Future of Finance ETF will begin trading on the New York Stock Exchange under the ticker symbol GFOF with U.S. Bank acting as its service provider. The ETF will track the performance of the Bloomberg Grayscale Future of Finance Index, which is a basket of stocks of various cryptocurrency-related companies. It initially features 22 firms, including Block, PayPal, Coinbase, and Silvergate Capital.

The Bloomberg Intelligence-crafted index that the ETF will track includes three broad types of companies in the digital assets space: “financial foundations,” “technology solutions,” and “digital asset infrastructure.” According to the press release, the financial foundations category will include crypto exchanges, brokerages, as well as investment managers. Technology solutions applies to companies that provide data and processing critical to the technology of the digital economy, and infrastructure companies includes cryptocurrency miners and other firms that help power the crypto ecosystem. 

The fund will not be actively managed but rather rebalanced quarterly. Notably, it does not directly invest in coins or tokens, but maintains indirect exposure to the industry through crypto-related companies. 

David LaValle, the Global Head of ETFs at Grayscale, called today’s move “a first step in what will be an ongoing strategic expansion of Grayscale’s investment offerings that leverage the ETF wrapper.”

This new digital assets focused exchange traded fund follows the SEC’s numerous rejections (or deferrals) of Bitcoin spot ETFs that directly track BTC. Just last week, the U.S. financial regulator denied Fidelity’s application. The SEC’s long history of Bitcoin spot ETF rejections is likely what spurred Valkyrie’s recent application for an ETF focused on Bitcoin mining. Grayscale has vocally opposed the SEC’s repeated spot ETF rejections and signaled that it hopes for its flagship product, GBTC, to become an ETF in the future. Meanwhile, it continues to provide investors exposure to crypto through GBTC and its other trusts. Now, with the Grayscale Future of Finance ETF launch, the firm is giving institutional investors new ways to get exposure to the fast-growing asset class. 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.