Digital asset manager Grayscale Investments plans to launch a Grayscale Future of Finance (GFOF) ETF that will offer an opportunity to invest in businesses involved in digital asset transactions.
In an application to the US markets regulator Securities Exchange Commission (SEC) filed November 5, Grayscale said the new ETF will track companies that are at “the intersection of finance, technology, and digital assets.”
“The fund will not invest in digital assets directly or through the use of derivatives
While it stated the fund will be listed on the New York Stock Exchange, it has not yet made public the expense ratio for the new fund.
Grayscale investment is popular for running Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE) that constitute 71 percent and 25 percent of its $60 billion in assets under management.
In October, it had made an application to convert the world's largest bitcoin fund GBTC into a spot ETF. However, SEC has refrained from approving any spot ETF involving a crypto asset.
What is Future of Finance Securities and why are they important?
Future of Finance companies are businesses involved in digital asset infrastructure, financial foundations, and technological solutions, per GFOF. The fund will invest in companies that are directly or indirectly linked to blockchain technology and the mining of digital assets. The passively managed ETF will track companies on the Bloomberg Grayscale Future of Finance Index.
As part of financial foundations, GFOF will invest in exchanges, asset managers, wealth managers, and brokerages. Technology solutions include the processing of transactions and data management. Mining and similar activities form the digital asset infrastructure. However, it won’t invest in crypto, Grayscale said in GFOF’s prospectus.
The rapidly evolving digital assets industry has brought about a complete ecosystem of decentralised money and finances. It’s disrupting the existing financial systems and offering an alternative that is more tuned to the needs of the time – an easy global payment system, hedge against inflation, to name a few.
Grayscale has been at the center of these developments through Bitcoin and Ethereum trust funds. Through the new fund, it wants to track the digital assets, ecosystem players.
As pointed out by a Bloomberg report, the filing signals Grayscale’s widening ambitions in the ETF universe. The firm hired a global ETF head in August. The new fund is planned at a time when crypto-related funds are expected to grow further amid high investor interest.
GFOF is an alternative way for investors to get exposure to the crypto industry, the Bloomberg report quoted the company as saying.
Speaking on the development, Grayscale spokesperson said that it was “yet another example of how Grayscale will continue to diversify its product family to meet the increasing demand for future-forward investment opportunities.”
In recent months, Grayscale has been trying to rejig its portfolio. In a list released recently, it said that it’s considering including some new tokens such as Solana, Uniswap, Polygon, Polkadot, Terra, among others.
(Edited by : Yashi Gupta)
