Which traditional financial giant will be the next to join the Bitcoin ETF race?

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Author: Ben Strack, blockworks Translator: Shan Oppa, Jinse Finance

After Franklin Templeton became the latest traditional financial company to apply to list a Bitcoin ETF, industry observers are waiting for the next big company to join.

Some market watchers have mentioned that fund giants Schwab Asset Management and State Street Global Advisors may soon follow suit, although the companies have not disclosed anything.

According to Ric Edelman, founder of the Digital Assets Council of Financial Professionals, Franklin Templeton’s application is a sign that more big players will join in, saying: “It will have a snowball effect; every fund house is going to have to offer Bitcoin ETFs, even if they disagree with this investment premise, will realize that they are losing assets under management, and even customers, to competitors offering these products.”

So, who's next?

Nate Geraci, president of The ETF Store, said in an article in June that Schwab Asset Management was a “dark horse” candidate to pursue a listed Bitcoin ETF.

David Botset, head of equity product management and innovation at Schwab Asset Management, told Blockworks in January 2022 that the firm was evaluating “opportunities such as in the form of listed cryptocurrency or blockchain technology ETFs.”

The company last year launched the Schwab Crypto Thematic ETF (STCE), which invests in cryptocurrency-related stocks such as Coinbase, MicroStrategy and various Bitcoin miners. The fund has approximately $11 million in assets. Schwab is also one of the backers of crypto exchage EDX Markets, which launched in June. A spokesperson for the company declined to comment on whether it would pursue a listed Bitcoin ETF.

State Street Global Advisors (SSGA) is also one of the candidates in the race to list a Bitcoin ETF, according to CK Zheng, co-founder of crypto hedge fund ZX Squared Capital. The company's U.S. ETFs have nearly $1.1 trillion in assets under management, with its second-largest ETF at $54 billion being its SPDR Gold Trust (GLD).

“Because we view Bitcoin as a commodity and digital gold, State Street is in a unique position to leverage its expertise and influence to expand its SPDR GLD ETF into the SPDR BTC ETF,” Zheng told Blockworks.

Bloomberg Intelligence senior analyst Eric Balchunas agreed, saying in response to Geraci's June article: "If you own GLD, how can you not quickly add listed Bitcoin?"

"We continually evaluate our product lineup and pricing structure to provide investors with attractive solutions to help them achieve their goals," a State Street spokesperson told Blockworks in a Monday email. , declined further comment. State Street officially launched a digital finance unit in 2021, and the unit’s focus this year includes tokenizing funds and private assets.

However, Rory Tobin, SSGA’s head of ETF operations, told Financial News in June that the company had no immediate plans to launch a crypto product, noting: “It’s hard to make an investment case for cryptocurrencies.”

ProShares runs the largest Bitcoin-related ETF in the United States, although it holds Bitcoin futures rather than BTC itself. About $900 million of the company's $6.5 billion in U.S. ETF assets under management is in its Bitcoin Strategy ETF (BITO). The company has not yet filed with the U.S. Securities and Exchange Commission to market the product. A spokesman declined to comment. “If they can bring this success to a spot Bitcoin ETF, they will become a major player in this space,” Zheng said.

stay on the sidelines

Matthew Sigel, head of digital asset research at VanEck, a potential Bitcoin ETF issuer, said that now is not the time to join the Bitcoin ETF race, considering the U.S. Securities and Exchange Commission (SEC) has blocked every attempt to launch a Bitcoin ETF over the past decade. Attractive opportunity.

Sigel said: “Who would want to join the race to launch a Bitcoin ETF given that an overzealous regulator is making the usual process impossible, fees will be kept to a minimum and there may not be much difference between sponsors?”

While Edelman expects other firms to seek to offer spot Bitcoin ETFs, he said there will be some exceptions.

“Some fund houses and advisory firms specialize in certain market segments and will not offer cryptocurrency funds if those markets are inconsistent with their brand, but these firms will be in the minority,” Edelman said.

According to Zheng, it is “very unlikely” that JPMorgan would join the Bitcoin ETF race, given CEO Jamie Dimon’s repeated criticism of the asset class. Jamie Dimon called Bitcoin an “overhyped fraud” in a May 2022 CNBC interview.

With nearly $2.2 trillion in U.S. ETFs under its management, Vanguard has not yet expressed any interest in the space.

Chief investment officer Greg Davis called cryptocurrencies “more of a speculative asset class” in May 2022, adding that while the company sees blockchain technology as attractive, Cryptocurrencies are “not a good fit” from an investment perspective. JPMorgan and Wind did not respond to requests for comment.

Edelman said that most registered investment advisers (RIAs) and brokerage firms will eventually offer spot Bitcoin ETFs, and he also said that wirehouses (large brokerage firms) may be slower to offer spot Bitcoin ETFs, whether it is their own products or others released products.

"They are certainly going to get involved eventually because their representatives and their clients are asking for it, but what's holding that back is the SEC's refusal to approve the application so far," Edelman said. "There is widespread optimism that this will That changes quickly.”

Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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