T. Rowe Price is filing for an actively managed crypto ETF, signaling the $1.8 trillion manager’s direct entry into digital assets.
Traditional asset manager T. Rowe Price has filed for a new actively managed crypto ETF. The firm was established as far back as 1937 and manages approximately $1.8 trillion in assets. Consequently, the filing is a very important milestone. Indeed, it is the direct step of the firm into the volatile crypto market.
Legacy Firms Seek Foothold in Expanding Crypto Market
Previously, T. Rowe Price only moved into the general ETF game in 2020. Therefore, this crypto filing is demonstrating its accelerated digital strategy now. Nate Geraci, president of The ETF Store, noted a legacy move, further mentioning that traditional managers are seeking a crypto strategy.
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In addition, many of these legacy firms did not get the jump on the initial ETF boom. Thus, they are eager not to make the same mistake with crypto exposure. For example, the wish for crypto to go away is clearly not sound business strategy. As a result, it is present-day to take diversification as vital for future expansion.
Moreover, the firm has been actively looking for new regions for investments. Outflows from its traditional mutual funds keep mounting. Therefore, this ETF move is a part of a larger diversification effort. As part of this effort, the firm has launched 24 ETFs over the past few years.
Specifically, the new ETF is intended to be actively managed. Unlike the passive funds, this gives the fund the ability to adjust holdings dynamically. It is able to overweight or underweight specific assets easily. For that reason, the fund seeks to outperform the FTSE Crypto US Listed Index.
T. Rowe Price’s Crypto ETF Awaits SEC Approval Amid Shutdown
The S-1 filing shows that the fund intends to hold between five and 15 digital assets. These include major cryptocurrencies such as Bitcoin, Ethereum, and Solana. Furthermore, the fund will also have others such as XRP, Dogecoin, and Cardano. Therefore, this provides wide exposure beyond the two major tokens that are currently there.
Crucially, the fund will not be holding cryptocurrencies directly. Instead, it will get exposure through crypto-related instruments. These include easily derivatives, swaps, and futures contracts. Consequently, this is a safer, indirect means of tracking the movements in the prices of cryptocurrencies now.
Todd Rosenbluth, head of research at VettaFi, applauded the move. He said it is exciting to see the ETF lineup go beyond stocks and bonds. Further, the firm hired Blue Macellari in the year 2022. Macellari is a former crypto hedge fund manager. He is now the head of its digital assets strategy.
In addition, this filing is after other successful crypto ETF launches. Firms such as BlackRock and Fidelity already have products on the market. Therefore, T. Rowe Price’s foray into it represents an accelerating trend of institutional adoption. However, the ETF is still waiting for regulation from the SEC. Final approval may be postponed because of a recent government shutdown.
