T. Rowe Price (TROW.O) files for an S-1 registration with the US Securities and Exchange Commission (SEC) to launch an actively managed Exchange Traded Fund (ETF) tied to multiple digital currencies. The move marks a pivotal moment for the firm’s expansion into digital assets, even as regulatory progress slows amid the ongoing US government shutdown.
T. Rowe Price’s first crypto ETF targets multiple digital currencies
Traditional finance continues to edge deeper into the crypto ecosystem as T. Rowe Price, one of the largest asset managers in the US, takes a major step by filing for an actively managed cryptocurrency ETF with the US SEC on Wednesday.
Nate Geraci, president of The ETF Store, noted that traditional asset manager T. Rowe Price, founded in 1937, is interested in actively managed crypto ETFs and said, “Can’t overstate significance.”
Geraci further explained that the firm, overseeing roughly $1.8 trillion in assets, only entered the ETF space in 2020, making this filing a significant milestone in its direct entry into the crypto market.
“Point is that legacy asset managers are quickly trying to figure out how to implement some semblance of a crypto strategy”, said Geraci.
Eric Balchunas, Senior ETF Analyst for Bloomberg, posted on X that “there are now 155 crypto ETP filings tracking 35 different digital assets. Could easily end up seeing over 200.”
However, the current US government shutdown has delayed the approval of several pending altcoin ETF applications, which were expected to launch in October. This delay potentially postpones a key catalyst that could have shifted overall crypto market sentiment.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.