Multinational financial services giant Charles Schwab has responded to customer demand for cryptocurrency investment by filing with the Securities and Exchange Commission (SEC) to launch a cryptocurrency economy ETF.
The filing comes just a week after Schwab’s head of investor services, Jonathan Craig, told news source Financial Advisor IQ that one in six Schwab customers expressed interest in investing in cryptocurrencies. He said:
“A full 16% of Schwab customers plan to invest in cryptocurrencies in the first half of the year.”
The proposed exchange-traded fund (ETF) aims to track the performance of an index designed to “provide global exposure to companies that can benefit from the development or use of cryptocurrencies and other digital assets.”
$7.5T Asset Manager Charles Schwab Files for the Crypto Economy ETF https://t.co/0cE6K3MvPB #CryptoCurrency (from Reddit) pic.twitter.com/XgCIdjHR2o — Jason Fernandez (@TokenJay) March 2, 2022
According to official documentation, the ETF will use the Schwab Cryptocurrency Economics Index as a benchmark index and invest “at least 80% of its net assets” in shares of companies that use Bitcoin (BTC) listed in the Schwab Cryptocurrency Economics Index. and other digital assets.
An ETF allows investors to speculate on the price of a basket of assets without having to hold or own them in any way. According to the announcement, the Schwab Cryptocurrency Economy ETF will not directly invest in either cryptocurrencies or Initial Coin Offerings (ICOs). However, he will invest in companies that deal with cryptocurrencies:
“The Fund may have indirect exposure to cryptocurrencies by virtue of its investments in companies that use one or more digital assets as part of their business activities or hold digital assets as their own investments.”
Related: Grayscale Launches Campaign to Encourage Public Comment on Bitcoin ETF Application
Schwab joins rival financial institution Blackrock by filing for a cryptocurrency ETF. Blackrock, the world’s largest asset management company with $10 trillion in assets under management (AUM), filed on Jan. 22. Its iShares Blockchain and Tech ETF will also invest in shares of blockchain and cryptocurrency companies on the New York Stock Exchange. Global Blockchain Technology Index Exchange Factset.
There are currently eight cryptocurrency or blockchain ETFs available to US investors from Bitwise, Global X, Siren, Amplify, two from First Trust, VanEck and Capital Link. These funds manage $1.7 billion in total assets.