The third-largest ETF issuer in the United States, State Street, and its subsidiary, State Street Global Advisors, have joined traditional financial institutions in exploring the growing trend of Crypto ETFs.
In a statement on June 26, State Street Bank announced that it will collaborate with the Crypto asset investment firm Galaxy Digital to launch a new Crypto ETF that will go beyond the flagship digital asset, BTC.
The company stated, “By combining the strengths of two major brands and pioneers, we will provide investors with a pathway into the $2.4 trillion digital asset ecosystem.”
State Street Global Advisors has submitted an application to the U.S. Securities and Exchange Commission (SEC) to register the SSGA Active Trust, a fund focused on Crypto assets.
As of March this year, State Street Global Advisors managed assets exceeding $4.3 trillion, while Galaxy Digital managed approximately $6.2 billion in assets.
According to SEC documents, SSGA will invest in various aspects of the Crypto asset market, including equity securities of Crypto asset companies, futures ETFs, contracts, and ETPs. Target industries include blockchain software developers, BTC miners, exchanges, and Crypto payment processors.
Additionally, State Street Bank will oversee the administrative and accounting responsibilities of the new digital asset ETF, while Galaxy Digital will supervise its day-to-day operations.
State Street Bank emphasized the increasing interest in digital assets from both institutions and retail investors since the introduction of spot BTC ETFs. This move aims to provide investment choices beyond pure spot BTC.
Mike Novogratz, the CEO of Galaxy Digital, expressed appreciation for this initiative and foresaw broader investment opportunities in the ecosystem beyond spot BTC. He added, “Expanding investment choices beyond pure spot BTC is the direction we believe the ecosystem will take next.”
While market observers see this as a positive step for Crypto assets as an asset class, Nate Geraci, president of ETF Store, expressed surprise that State Street Bank did not prioritize spot BTC and Ethereum ETFs, as they dominate the Crypto asset market.
Since its launch in January this year, BTC ETFs currently manage over $50 billion in assets, attracting significant interest from the financial industry.
Market experts also predict that the upcoming Ethereum ETF could attract as much as $15 billion in inflows within the first 18 months.