State Street Global Advisors Collaborates with Galaxy Digital to Introduce Crypto ETFs
Asset management giant State Street Global Advisors has teamed up with cryptocurrency investment firm Galaxy Digital to launch innovative exchange-traded funds (ETFs) that offer exposure to digital assets.
Recognizing the growing interest from both institutional and retail investors in digital assets, the partnership aims to provide investment options beyond the traditional spot Bitcoin ETFs. With State Street overseeing approximately $4.1 trillion in assets, the collaboration emphasizes the importance of meeting the evolving needs of investors in the digital asset landscape.
The proposed SPDR Galaxy Digital Asset Ecosystem ETF, detailed in a filing to the United States securities regulator, is designed to invest in publicly traded digital asset companies. This ETF will encompass a diverse array of businesses operating in the digital asset sector, including crypto exchanges, mining companies, hardware wallet service providers, and crypto-focused venture capital firms in domestic and international markets. Additionally, the fund will explore opportunities in futures and spot ETF products to offer diversified exposure to the digital asset market.
This initiative by State Street and Galaxy Digital underscores the growing acceptance of cryptocurrencies and digital assets as a legitimate asset class. Anna Paglia, Chief Business Officer at State Street Global Advisors, expressed that they believe digital assets extend beyond individual cryptocurrencies and that companies native to the crypto space are best positioned to navigate this ecosystem and its connection to financial markets.
State Street Bank and Trust is poised to deliver administrative and accounting services for the digital asset ETFs developed through this partnership. State Street’s venture into the digital asset realm began in June 2021 with the launch of a specialized digital asset division. While State Street did not apply for spot Bitcoin or Ether ETFs recently, competitors who introduced such ETFs have experienced significant inflows, with over $14.4 billion recorded within just five and a half months, according to data from Farside Investor.
In parallel, SEC Chair Gary Gensler has indicated that the progression toward launching the first spot Ether ETFs is proceeding smoothly. Gensler refrained from specifying a timeline for the ETFs’ launch during a recent conference and avoided commenting on the possibility of them going live before the November U.S. elections. He stressed the importance of asset managers providing complete disclosure in their registration statements, a requisite for the effectiveness of the ETFs.
Various prominent asset managers, including VanEck, BlackRock, Grayscale, Invesco Galaxy Digital, and Fidelity, have submitted revised proposals for Ethereum ETFs to the SEC. These filings aim to update information on their respective Ethereum funds. VanEck, for example, disclosed a management fee of .20% for its Ethereum fund, aligning closely with competitors like Franklin Templeton, which charges a .19% management fee.
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