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Invesco Ltd’s newly formed partnership with crypto billionaire Michael Novogratz’s Galaxy Digital Holdings Ltd. is already bearing fruit in the form of two new exchange-traded funds.
The Invesco Alerian Galaxy Crypto Economy ETF (ticker SATO, in a nod to Bitcoin’s mysterious founder, Satoshi Nakamoto) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) begins trading Thursday on Cboe Global Markets. The ETFs are passively managed, rebalanced monthly and charge an expense ratio of 0.60%.
Roughly 80% of SATO’s portfolio is dedicated to companies that derive more than 50% of their performance from cryptocurrency activities, such as mining companies, crypto infrastructure builders and crypto-buying companies. BLKC invests in largely the same companies, but also tracks firms engaged in blockchain technology that aren’t necessarily tied to cryptocurrency. Additionally, both firms have 15% of their holdings in shares of the Grayscale Bitcoin Trust, the largest allocation to a physically-backed Bitcoin vehicle among U.S. exchange-traded products.
“Today’s launch opens up a new way for investors to access this fast-growing asset class, combining exposure to key companies in the cryptocurrency and blockchain ecosystem with an allocation to an investment vehicle that directly holds digital assets, all within the ETF wrapper,” said John Hoffman, head of Americas, ETFs and indexed strategies at Invesco, said in a press release.
SATO and BLKC are among the nearly dozen of crypto-flavored ETFs that have cropped up as issuers seek regulatory approval for cryptocurrency ETFs. The U.S. Securities and Exchange Commission has delayed making a decision on the structure several times this year under Chairman Gary Gensler. However, a growing cohort of industry observers are speculating that the green light for futures-based Bitcoin ETFs could come this month.
In the meantime, SATO and BLKC provide an avenue for investors across the size spectrum to get exposure to cryptocurrency through ETFs, according to Galaxy’s Steve Kurz.
“Today marks an exciting milestone as we unlock another way for retail and institutional investors to get involved in the rapidly evolving and transformative world of digital assets,” Kurz, a partner and head of asset management at Galaxy, said in the release.
