Grayscale Investments, the giant crypto investment fund manager, is diversifying its investment products with the launch of its first ETF (exchange-traded fund), which offers indirect exposure to Bitcoin.
The firm with more than USD $38 billion in assets under management received approval from US regulators to bring the “Future of Finance” ETF to market, acording to Coindesk.
While not a Bitcoin-based vehicle, the fund tracks the share prices of some of the top companies in the crypto industry.
The ETF tracks the Bloomberg Grayscale Future of Finance (BGFOF) Index, a new joint index between Grayscale and Bloomberg. Said index, which was launched in January, tracks the share prices of 22 companies committed to the digital currency space. These include Coinbase, PayPal, Block (formerly Square), and crypto-friendly bank Silvergate Capital.
Unlike other similar investment vehicles, the fund does not include shares of companies like Tesla or MicroStrategy that hold Bitcoin on their balance sheets or accept it as payment, according to a Grayscale spokesperson.
Grayscale’s new ETF offers investors exposure to Bitcoin through betting on the performance of a variety of companies whose businesses are largely devoted to digital currencies.
The ETF will begin trading this Wednesday on the New York Stock Exchange (NYSE) under the symbol GFOF.
To date, Grayscale had focused on offering investment products tied directly to a wide range of cryptocurrencies such as Bitcoin and Ethereum.
“While Grayscale has established itself as a global leader in digital currency investment, the future of finance demands a much broader mandate,” Grayscale CEO Michael Sonnenshein said in a press release.
For his part, David LaValle, global director of ETFs at the company, highlighted that the initiative represents “a first step in what will be an ongoing strategic expansion of Grayscale’s investment offerings that take advantage of the ETF wrapper.” And I add:
Through GFOF, investors now have the opportunity to receive exposure to companies that are critical to the evolution of the global financial system.
Separately, Grayscale continues to wait for the US Securities and Exchange Commission (SEC) to approve the conversion of its flagship Grayscale Bitcoin Trust (GBTC) into a bitcoin dot ETF. If approved, the ETF would be backed by actual units of the cryptocurrency, not simply linked through derivative contracts like futures.