One of the biggest issuers of Exchange Traded Funds (ETF) in the U.S., Invesco Ltd., has announced a partnership with Galaxy Digital Holdings, an institution that deals with digital assets and blockchain. The fourth-largest issuer revealed that the collaboration would create digital assets funds for market-leading virtual ETFs. However, the venture is yet to receive backing from the SEC.
According to reports, the partnership between Novogratz’s Digital Holdings and the ETF firm will create U.S.-backed assets funds that enable investors to trade them. Although the SEC is yet to look into ETFs, Invesco is confident that the launch of the fund would be approved, as it has already filed an application.
Demand Fueling the Launch of Digital Assets Fund for ETFs
Retail investors’ demands are amongst the factors fueling the establishment of a Digital Asset Fund. Despite the wild clamor, the crypto industry is yet to get major funding from ETFs. Experts and retailers have seen the potential growth in ETFs, but the SEC has been meticulous about it.
Invesco’s business lead John Hoffman said that ETFs have excellent growth potential. Hoffman stated that Invesco spent several years in the blockchain industry and likened its growth to the early days of ETF in the 1990s. While sharing his excitement on focusing on crypto ETFs, Hoffman revealed that ETFs would grow as big as cryptos.
Many customers see investing in digital assets as a speculative tool, and this is what Invesco aims to correct. The company wants investors to see ETFs as a technology instead of volatile tools that are not backed. Hoffman believes that the virtual currency aspect of ETFs will follow in the footsteps of commodity-tracking funds since they are similar.
The SEC has been particular about the virtual currency industry and the ETFs intertwined. According to Chair Gary Gensler, tying the ETFs to the crypto industry could lead to a potential risk in terms of investors’ losses. However, the Chair has said that the regulatory body is open to any discussion about crypto-based ETFs.
Invesco Ltd. is an independent investment firm that offers a wide range of investments opportunities and services to retail customers, corporations, NGOs, financial institutions, etc. The company is also an asset management firm that manages private funds, mutual funds, ETFs, commodities, etc., and invests in several income markets and commodities markets globally. It began operations in 1935 and is based in Atlanta, Georgia, and with regional offices in over 26 countries across the world.