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Grayscale Introduces A Crypto-Focused ETF

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Grayscale Investments has created its first ETF. The Bloomberg Grayscale Future of Finance ETF will follow the Bloomberg Grayscale Future of Finance Index.

Grayscale Investments, the world’s largest digital asset manager with more than $38 billion in assets under management, has entered the ETF market for the first time.

Grayscale revealed the upgrade in a news release on Wednesday. Grayscale Future of Finance ETF will begin trading on the New York Stock Exchange under the ticker symbol GFOF, with US Bank serving as its service provider. The Bloomberg Grayscale Future of Finance Index, which is a basket of stocks from several cryptocurrency-related companies, will be tracked by the ETF. It began with 22 companies, including Block, PayPal, Coinbase, and Silvergate Capital.

The ETF will track a Bloomberg Intelligence-created index that covers three major types of companies in the digital assets space: “financial foundations,” “technology solutions,” and “digital asset infrastructure.” The financial foundation’s category, according to the news release, will comprise crypto exchanges, brokerages, and investment managers. Companies that supply data and processing important to the technology of the digital economy are referred to as technological solutions, while cryptocurrency miners and other enterprises that help power the crypto ecosystem are referred to as infrastructure companies.

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

Grayscale’s Global Head of ETFs, David LaValle, described the move as “a first step in what will be an ongoing strategic growth of Grayscale’s investment services that use the ETF wrapper.”

Following the SEC’s many rejections (or deferrals) of Bitcoin spot ETFs that directly track BTC, the SEC has launched this new digital assets oriented exchange traded fund. Fidelity’s application was dismissed by the US banking regulator just last week. The SEC’s long history of rejecting Bitcoin spot ETF applications is likely what prompted Valkyrie’s current filing for a Bitcoin mining ETF. Grayscale has been loud in its opposition to the SEC’s repeated spot ETF rejections and has expressed hope that its flagship product, GBTC, will become an ETF in the future. Meanwhile, through GBTC and its other trusts, it continues to give investors exposure to cryptocurrency. With the launch of the Grayscale Future of Finance ETF, the firm is now providing institutional investors with new opportunities to gain exposure to the rapidly rising asset class.