The Crypto Giant Makes a Push to Become a “World-Class ETF Issuer”

  • Grayscale Fund will track companies involved in the development of the ‘digital economy.’
  • The company has applied to convert a $24 billion Bitcoin trust into an ETF.
  • The world’s largest cryptocurrency fund manager is entering the $7 trillion exchange-traded fund market for the first time.

Grayscale Investments LLC’s Future of Finance ETF (ticker GFOF), which goes public on Wednesday, is intended to track companies that are “actively building and advancing the digital economy,” according to David LaValle, the firm’s global head of ETFs. Companies such as Silvergate Capital Corp., Coinbase Global Inc., and PayPal Inc. are part of this vision.

Grayscale’s first step toward becoming a “world-class ETF issuer,” according to LaValle, who was hired in August to lead that effort. In October, the asset manager filed a proposal to convert the $24 billion Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin fund, into an ETF, a structure that has been repeatedly rejected by US regulators. Meanwhile, Grayscale, according to LaValle, is working to meet investor demand for exposure to elements of the crypto industry.

“While GBTC conversion is certainly a goal, it is not the goal,” LaValle explained over the phone. “I joined with the express intention of establishing a world-class ETF issuer, and GFOF is the first iteration of that.”

Several funds, including the $956 million Amplify Transformational Data Sharing ETF (BLOK) and the $221 million Siren Nasdaq NexGen Economy ETF, have launched to track crypto-linked equities (BLCN). Both have suffered in recent months, with Bitcoin falling 44 percent from its all-time high in November.

Unlike other ETFs that hold crypto-linked equities, the mission of GFOF is to identify companies that will play a defining role in shaping the intersection of finance and digital assets, according to LaValle. This means that the ETF will not invest in companies that have Bitcoin on their balance sheets, payment processors, or semiconductor chipmakers, which are popular among other crypto-themed funds.

“This is defining a new theme, which is the digital economy,” LaValle explained. The underlying index is “designed to capture companies that are the foundation of the digital economy.”

GFOF will be managed passively and will charge a fee of 0.7 percent.


Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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