State Street Global Advisors and Galaxy Digital Collaborate to Launch Crypto ETFs

In a strategic partnership, asset manager State Street Global Advisors and crypto investment firm Galaxy Digital are set to introduce new exchange-traded funds (ETFs) that provide exposure to digital assets. Recognizing the growing interest from both institutional and retail investors in the digital asset space, these ETFs aim to go beyond traditional spot Bitcoin offerings.

The SPDR Galaxy Digital Asset Ecosystem ETF

The proposed SPDR Galaxy Digital Asset Ecosystem ETF will focus on publicly-traded digital asset companies. This ETF will encompass a diverse range of firms operating in the digital asset landscape, including:

1. Crypto Exchanges: Platforms facilitating digital asset trading.
2. Mining Companies: Involved in cryptocurrency mining operations.
3. Hardware Wallet Service Providers: Offering secure storage solutions for digital assets.
4. Crypto-Focused Venture Capital Firms: Supporting innovation and growth in the crypto industry.

The fund will also explore investment opportunities in futures and spot ETF products, aiming to provide diversified exposure to the dynamic digital asset market. State Street Bank and Trust will handle administrative and accounting services for these ETFs.

A Shift in Investment Landscape

This collaboration reflects the mainstream acceptance of cryptocurrencies and digital assets as a legitimate asset class. Anna Paglia, Chief Business Officer at State Street Global Advisors, emphasized that the digital assets landscape extends beyond individual cryptocurrencies. Crypto-native companies possess unique insights into this ecosystem and its correlation with financial markets.

State Street’s involvement in the digital asset space dates back to June 2021 when it launched a dedicated digital asset division. While State Street was not among the recent applicants for spot Bitcoin or Ether ETFs, competitors who launched such ETFs have seen substantial inflows, with over $14.4 billion recorded in just five and a half months.

Ether ETFs Progressing

Meanwhile, SEC Chair Gary Gensler has indicated that the launch of the first spot Ether ETFs is progressing smoothly. Although he refrained from providing a specific timeline, Gensler emphasized the importance of asset managers’ full disclosure in their registration statements—a prerequisite for ETF effectiveness.

The collaboration between State Street and Galaxy Digital underscores the evolving investment landscape, where digital assets play an increasingly significant role.