The Invesco Galaxy Crypto Economy ETF is billed to track the investment results of the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Index while the Galaxy Blockchain ETF will track the results of the Alerian Galaxy Global Blockchain Index.
Atlanta, Georgia-based asset management firm, Invesco has filed for two crypto-backed Exchange Traded Funds (ETFs) with the United States Securities and Exchange Commission (SEC). Per the filing, the new investment vehicles dubbed the Invesco Galaxy Blockchain Economy ETF and the Invesco Galaxy Crypto Economy ETF will be crypto-backed equities with as much as 85% of the funds committed to this pursuit. The rest of the investment funds will be pumped into other trusts and funds that hold crypto.
The clamor for a cryptocurrency-based ETF has been on for a while and over the years, the SEC has dashed hopes for these regulated investment options with its constant rejections of applications filed before it. Cryptocurrency is growing and, moreover, institutional investors are embracing the asset classes by the day. This has brought Bitcoin and altcoins into the limelight and American investors want an option to stack up or gain exposure to digital currencies with a god guarantee for the law backing their moves.
The increasing trust in Bitcoin ETFs in the United States was seen as a more imminent possibility the ascent of Gary Gensler as the Chairman of the SEC. However, a pessimistic statement the chief regulator made in the past month somewhat dashed the hopes for the new investment alternatives. The SEC boss opined that the core prerequisites for the commission to regulate the crypto ecosystem have not been met and requested Congress to grant it permission to oversee trading venues.
Market analysts believe this dampens hopes for a potential ETF approval this year.
“The SEC has made their priorities clear, and vetting crypto ETFs is not one of them,” said Ben Johnson, Morningstar Inc.’s global director of ETF research. “Given that the SEC has bigger fish to fry, and taking Gensler’s recent remarks regarding crypto ETFs into account, I think the odds we’ll see a Bitcoin ETF approved in 2021 are very low.”
There are currently over 9 ETF applications on the SEC’s desk for review, with the timeline shortening by the day.
Invesco Crypto-Backed ETF Proposal May Get Favored
Coming off as one of the ETF-related applications on the SEC’s radar, the Invesco crypto-backed ETF proposal may see the light of the day. This is because the ETFs will indirectly invest in cryptocurrencies unlike the majority of the ETFs already filed with the commission.
Invesco is an established firm with over $1.5 trillion in Assets Under Management (AUM). The Invesco Galaxy Crypto Economy ETF is billed to track the investment results of the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Index while the Galaxy Blockchain ETF will track the results of the Alerian Galaxy Global Blockchain Index.
Amongst the firms expecting feedback per their various crypto-ETFs submitted to the SEC include WisdomTree, VanEck, and Mike Novogratz’s Galaxy Digital Holdings Ltd (TSE: GLXY)