Digital asset manager Grayscale has made another application with the U.S. Securities and Exchange Commission (SEC) for a new exchange-traded fund tracking fintech firms.
On Nov 5, Grayscale Investments LLC submitted an application for the Future of Finance ETF to trade under the ticker GFOF. According to the filing, the fund would track stocks of firms at “the intersection of finance, technology, and digital assets.”
Grayscale is keen to stay ahead of the curve in the crypto industry. In October, the firm filed an application to convert its popular Bitcoin Trust into a physically-backed BTC exchange-traded fund.
The proposed GFOF is an alternative way for investors to get exposure to the crypto industry, according to a Nov 8 Bloomberg report.
Tracking crypto equities
The Future of Finance product would track crypto equities if approved by the SEC. These could include the $1.6 billion Amplify Transformational Data Sharing ETF (BLOK) and the $313 million Siren Nasdaq NexGen Economy ETF (BLCN).
Speaking about the new fund, a Grayscale spokesperson stated that it is “yet another example of how Grayscale will continue to diversify its product family to meet the increasing demand for future-forward investment opportunities.”
The SEC has yet to approve any ETF that is not backed by Chicago Mercantile Exchange (CME) futures contracts. It currently has no appetite for more exotic derivatives such as leverage or inverse funds and has repeatedly delayed spot-based ETFs.
There has been a lot of lobbying from industry leaders and Congressmen to SEC Chair Gary Gensler to approve a spot ETF but as yet it has fallen on deaf ears. The latest delay was for Valkyrie’s Bitcoin Trust which was postponed for the third time to Jan 7, 2022. The next date to watch is Nov 14 where it is expected that the SEC will deny VanEck’s application for a spot Bitcoin EFT.
Tweaking portfolios
Grayscale has been tweaking its crypto portfolio in recent months, dropping some assets and adding others such as Solana (SOL) and Uniswap (UNI). Earlier this month it released a list of potential tokens for consideration including Avalanche (AVAX), EOS, Internet Computer (ICP), Loopring (LRC), Monero (XMR), Polygon (MATIC), Polkadot (DOT), and Terra (LUNA).
According to its latest update on Nov 9, Grayscale currently has $59.2 billion in assets under management. The Bitcoin Trust holds the lion’s share, or 71% of the total, while there is $14.7 billion, or 25% in the Ethereum trust.
The Bitcoin Trust is currently trading at a premium to the net asset value and has been for most of this year.
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