(Bloomberg) — The world’s largest cryptocurrency fund manager is making its first foray into the $7 trillion exchange-traded fund business.
Grayscale Investments LLC’s Future of Finance ETF (ticker GFOF), which begins trading Wednesday, is designed to track companies that are “actively building and growing the digital economy,” the ETF David Lavelle, the firm’s global head, said. That vision includes companies such as Silvergate Capital Corp., Coinbase Global Inc., and PayPal Inc.
The fund is Grayscale’s first step in attempting to transform into a “world-class ETF issuer,” said LaValle, who was hired in August to lead that effort. In October, the asset manager filed 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. In the meantime, Grayscale is working to meet investor demand for elements of the crypto industry, according to LaValle.
“While GBTC conversion is certainly a goal, it is not,” LaValle said in a phone interview. “I stick to the clear goal of creating a world-class ETF issuer, and GFOF is the first iteration of that.”
Several funds have been launched to track crypto-linked equities, such as the $956 million Amplify Transformational Data Sharing ETF (BLOK) and the $221 million Siren Nasdaq NexGen Economy ETF (BLCN). Both have faced bitcoin’s 44% swoon from November’s all-time high in recent months.
However, unlike other ETFs that hold crypto-linked equities, the mission behind GFOF is to identify companies that will play a defining role in shaping the intersection of finance and digital assets, LaValle said. This means the ETF will not put companies containing bitcoin on balance sheets, payment processors or semiconductor chipmakers, which are popular among other crypto-themed funds.
“It is defining a new topic, and that topic is the digital economy,” LaValle said. The underlying index is “designed to capture the companies that make up the bloc of the digital economy.”
The GFOF will be managed passively and will be charged at 0.7%.