Invesco Plans to Launch Two Crypto-Based ETFs

Invesco, a U.S. investment management firm with over $1 trillion in assets under management (AUM), has joined the growing list of firms looking to launch cryptocurrency-focused exchange traded funds (ETFs).

• In an SEC filing on Wednesday (June 9, 2021), Invesco revealed that it was planning to launch two crypto-based ETFs. They include the Invesco Galaxy Crypto Economy ETF and the Invesco Galaxy Blockchain Economy ETF.
• According to an excerpt from the document:

“The Fund will allocate its assets in the same proportion as the Underlying Index (i.e., under normal circumstances, the Fund will invest approximately 85% of its assets in securities of the Equity Component, 10% in the Futures Component and 5% in the ETP and Trust Component).”

• While most applications seek to directly invest in cryptocurrency, Invesco’s does not seek a direct crypto investment.

“The Fund will not invest directly in cryptocurrencies or crypto assets directly and will not invest in initial coin offerings. The Fund may, however, have indirect exposure to crypto assets by virtue of its investments in companies that use one or more crypto assets as part of their business activities or that hold crypto assets as proprietary investments.”

• The U.S. SEC has, to date, not approved any Bitcoin ETF applications, having rejected several proposals in the past, citing market manipulation and volatility.
• As reported by CryptoPotato in April, the American regulator postponed its decision on the VanEck Bitcoin ETF till June.
• With other Bitcoin ETFs still pending the SEC’s decision, Invesco’s plan not to directly invest in crypto could get the regulator to grant its approval within a shorter timeframe.