Investment Titan Charles Schwab Files for ‘Crypto Economy’ ETF

Multinational financial services giant Charles Schwab has just submitted filings for a new crypto-related exchange-traded fund (ETF).

The ETF, called the “crypto economy ETF," aims to follow a collection of crypto firms that exist within The Schwab Crypto Economy Index, but the specific firms haven’t been revealed yet.

If approved by the SEC, the new ETF will trade on the New York Stock Exchange (NYSE).

As per the filing,

"The fund’s goal is to track as closely as possible, before fees and expenses, the total return of an index that is designed to deliver global exposure to companies that may benefit from the development or utilization of cryptocurrencies (including bitcoin) and other digital assets, and the business activities connected to blockchain and other distributed ledger technology."

The filing also states that the fund may utilize cash-settled Bitcoin futures on the Chicago Mercantile Exchange (CME) as part of its non-principal investment strategy.

Schwab mentions that the new fund will not be directly investing in any cryptocurrencies or initial coin offerings (ICO). The filing says that the fund may, however, “have indirect exposure to cryptocurrencies by virtue of its investments in companies that use one or more digital assets as part of their business activities or that hold digital assets as proprietary investments.”

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Publicly, Charles Schwab CEO Walt Bettinger has been somewhere between neutral and cautiously optimistic on crypto. At the Securities Industry and Financial Markets Association’s annual conference in November, Bettinger said that crypto had become large enough and that consumer awareness was high enough that “you can’t ignore it.” 

From a corporate standpoint however, Bettinger said the firm didn’t “really take a viewpoint on whether it’s right for investors.”

“Personally, I really have no opinion on Bitcoin as an investment any more than I do artwork or the explosion in values of baseball cards of late,” he said.

Bettinger predicted there will be “more and more ways to invest in crypto — maybe ways that are a bit safer than direct purchases.”

“When you look at it from a regulatory standpoint, it seems pretty clear that there’s a certain group of organizations that are not headed toward direct trading at this point and, generally speaking, they’re under a common regulator with the Federal Reserve,” he said, adding that conversely, “some of the organizations that are under a different regulatory regime seem to be stepping out a bit more on the direct trading side.”