Crypto Giant Grayscale Launches First ETF To Bet On “Future Of Finance”

Crypto and digital asset manager firm Grayscale launched its first Exchange Traded Fund (ETF) in collaboration with Bloomberg. Per a press release, the investment product will trade under the ticker GFOF and will track the Bloomberg Grayscale Future of Finance Index.

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Grayscale created this ETF, heavily linked to crypto-based or crypto-related companies in some form, based on the idea that the digital economy will continue to expand. Demand for digital payments and services has seen growth, mostly driven by the COVID-19 pandemic.

Crypto giant Grayscale believes that demand will thrive and will boost global commerce, make the market more efficient, and diversify sources of capital while they become cost-efficient. Michael Sonnenshein, CEO at the digital asset manager said the following in their recent announcement:

We’re proud to announce our first ETF in partnership with Bloomberg as we undertake this strategic expansion of our business. This product draws upon our historical strengths, while kicking off the next stage of our evolution as an asset manager that helps investors build portfolios that can stand the test of time.

According to Eric Balchunas, Senior ETF Analyst for Bloomberg Intelligence, Grayscale’s Future of Finance ETF will be comprised of over 20 companies within the Bloomberg Index. Crypto exchange Coinbase, Robinhood, Argo Blockchain, Hut 8 Mining, Bitfarms, Galaxy Digital Holdings, Bakkt Holdings, and PayPal are some of them.

A U.S. bank will administer and operate as a service provider for the investment product with Foreside, an ETF solutions company, acting as distributor. Dave Gedeon, Global Head of Multi-Asset Indices at Bloomberg, claimed to be excited to collaborate with the crypto giant and added:

Backed by our proprietary data married with robust research from Bloomberg Intelligence, the Bloomberg Grayscale Future of Finance Index is primed to become the key equity benchmark for our ever-evolving digital economy.

Crypto Manager Launches ETFs, But How Are Its Companies Performing?

The Grayscale ETF, per the release, will be supported by three main sectors. First, the investment product will have a financial foundation, focused on crypto exchange and traditional exchanges and brokerages, wealth managers, and other entities “involved in the enablement of the digital economy”.

Second, the ETF will be centered on technology and those entities that “facilitate the digital economy” via data and processing. Finally, the ETF will focus on digital asset infrastructure or companies directly related to crypto mining, and those activities that support the digital economy. David LaValle, Global Head of ETFs at Grayscale Investments said:

(…) we are thrilled to reach this important milestone: a first step in what will be an ongoing strategic expansion of Grayscale’s investment offerings that leverage the ETF wrapper. Through GFOF, investors now have the opportunity to receive exposure to the companies that are pivotal to the evolution of the global financial system.

Grayscale has been trying to move into the ETFs sector for several months. The company filed for a Bitcoin spot ETF but is yet to receive an answer from the U.S. Securities and Exchange Commission on its application.

Related Reading | Morgan Stanley Deepens Crypto Exposure Through Grayscale Bitcoin Trust

Some of the companies that will be tracked by this investment product have seen negative performance for several months. PayPal (PYPL) is down 26% in the daily chart, while BKKT has seen a 9.76% loss in similar timeframes, with Coinbase recording a 6.91% loss.