Grayscale ETF Plans Take Shape With ‘Future of Finance’ Filing

(Bloomberg) -- Whether or not it manages to convert its $40 billion Bitcoin product, the biggest crypto fund manager still plans to take the ETF industry by storm. 

Grayscale Investments LLC submitted an application on Friday for the Future of Finance ETF (ticker GFOF), which would track shares of companies at “the intersection of finance, technology and digital assets,” according to a filing with the U.S. Securities and Exchange Commission. It’s Grayscale’s first ETF filing outside of its efforts to convert the Grayscale Bitcoin Trust (GBTC) -- the world’s largest Bitcoin fund -- into an exchange-traded fund.

The filing signals Grayscale’s widening ambitions in the ETF universe after the digital-asset management firm hired a global ETF head in August, and it comes as crypto-related funds are poised for further growth amid investor interest in exposure to the industry and buy-in by regulators. The first U.S. Bitcoin futures-backed ETFs launched last month to explosive demand, nearly a decade after the first applications were filed. However, U.S. regulators have yet to sign off on a physically-backed ETF, leaving funds such as GBTC -- which held roughly 3.4% of the world’s Bitcoin supply as of mid-October -- in a holding pattern. In the meantime, GFOF is an alternative way for investors to get exposure to the crypto industry, according to Grayscale. 

“Since our founding in 2013, we have worked to create a suite of secure, familiar investment products that provide investors with access to the digital economy,” a Grayscale spokeswoman wrote in an email. The GFOF filing “is yet another example of how Grayscale will continue to diversify its product family to meet the increasing demand for future-forward investment opportunities.”

If approved, GFOF would be one of several funds tracking crypto-linked equities, including the $1.6 billion Amplify Transformational Data Sharing ETF (BLOK) and the $313 million Siren Nasdaq NexGen Economy ETF (BLCN). Invesco launched two such funds in October, while Valkyrie refiled for the Valkyrie Innovative Balance Sheet ETF last week.

While Grayscale plots new funds, the clock is ticking on its proposal to convert GBTC into an ETF -- a process that CEO Michael Sonnenshein says the firm is “100% committed” to doing. Regulators acknowledged the GBTC proposal last week, effectively starting the clock for the SEC to either reject or delay the conversion by year-end.

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