Schwab Strategic Trust Files with the SEC for a Crypto ETF

Recently, the Schwab Strategic Trust filed with the US Securities and Exchange Commission (SEC) for a Schwab Crypto Economy ETF, indicating the rising institutional interest in the digital assets space.

Schwab Strategic Trust Files with the SEC

According to a report by Ledger Insights, Schwab Strategic Trust – an offshoot of Charles Schwab – has filed with the US financial watchdog for a Schwab Crypto Economy ETF.

The Trust seeks to develop the Schwab Crypto Economy Index which will undergird the ensuing ETF. Notably, the index would comprise listed stocks in the cryptocurrency industry, including exchange platforms, those doing cryptocurrency mining or staking, and the ones developing applications using blockchain technology.

It is worthy of note that if approved, it wouldn’t be the first such ETF as in July 2021, Goldman Sachs filed its own ETF prospectus. However, if Schwab’s application is approved it would be the biggest brand to launch a crypto ETF to date.

 While other Wall Street names such as Fidelity Investments have been involved in the cryptocurrency industry for years, they haven’t quite entered the ETF space yet. Similarly, the popular stocks and crypto trading app Robinhood also allows users to seamlessly trade digital assets, but it has made no foray into the crypto ETF territory just yet.

Schwab’s decision comes as a surprise as in November 2021, the company said in a blog post:

For example, in mid-November last year, a Schwab blog post concluded that:

“Schwab continues to monitor cryptocurrencies as regulations and technology evolve.”

Adding:

“While some traders have made money on the change in price of Bitcoin or other cryptocurrencies (and others have lost money), we suggest that most investors treat them as a speculative asset primarily for trading with money outside a traditional long-term portfolio.”

In the same vein, the biggest ETF issuer today, Vanguard, expressed its hesitancy to enter the crypto ETF space. In September 2021, the company wrote:

“Since cryptocurrencies are highly speculative in their current state, Vanguard believes their long-term investment case is weak.”

Strong Demand for Crypto ETFs

It would be recalled that in October 2021, the US witnessed its first publicly traded crypto ETF when Proshares launched its BITO bitcoin ETF, attracting more than $570 million in assets on its first day of trading.

Shortly after, Grayscale announced it had submitted an application to the US SEC to convert its GBTC product into a bitcoin ETF. However, the regulator has so far avoided doing the same.

The company said:

“In becoming the first crypto SEC reporting investment vehicle, GBTC has helped move the entire digital currency ecosystem forward. As we file to convert GBTC into an ETF, the natural next step in the product’s evolution, we recognize this as an important moment for our investors, our industry partners, and all those who realize the potential of digital currencies to transform our future.”

In similar news, crypto.news reported on January 30 that Fidelity Investments had filed paperwork for ETFs connected to the metaverse-based tokens with the US financial regulator.