Charles Schwab latest heavyweight to launch crypto ETF
Charles Schwab’s asset management arm has launched an exchange-traded fund (ETF) with exposure to firms linked to cryptocurrencies.
The financial services giant said its Crypto Thematic ETF is set to debut trading on the New York Stock Exchange’s Arca under the ticker STCE on Aug. 4. Without needing to directly own digital assets, the fund index-tracking ETF offers exposure to companies involved with cryptocurrencies, as well as business activities connected to blockchain technology.
Specifically, the new fund tracks Schwab’s Crypto Thematic Index, signaling the brokerage is looking for growth opportunities tied to digital currencies. It plans to invest at least 80% of net assets in stocks included in the Schwab Crypto Economy Index.
The index does not directly track or invest in cryptocurrencies. Rather, it is designed to deliver exposure to companies that may benefit from one or more of the following business activities: “either directly or facilitating others in validating consensus mechanisms for (such as mining or staking) investing in, or trading cryptocurrency or other digital assets; enabling the use of cryptocurrency or other digital assets to buy or sell goods or services; and developing, distributing or implementing applications of blockchain or other distributed ledger technology, including in new cryptocurrencies or digital assets.”
Alongside the release of the new ETF, Schwab published a report that shows 20% of respondents to its most recent retail client sentiment survey said they’d invested in crypto in the last three months. Additionally, 16% said they planned to do so again in the upcoming months.
The Schwab ETF follows industry frays of heavyweights like BlackRock and Fidelity Investments to launch an ETF focused on blockchain technology. The world’s largest asset manager launched a blockchain-focused ETF in April that provides investors with exposure to the crypto and blockchain industry. The company, which manages around $10 trillion in assets, added the Blockchain and Tech ETF (IBLC) to its iShares product line.
Fidelity Investments also revealed plans to bring to market ETFs that would invest in companies involved in the metaverse and crypto more broadly. Other financial institutions have gradually warmed to the booming crypto markets as well.
These products offer the three firms’ massive professional client base tailored exposure to the crypto economy, though they are non-controversial from a regulatory standpoint.
