Key takeaways
What makes this ETF different from others?
It is an actively managed multi-coin ETF, using fundamental, valuation and momentum factors to determine which assets to hold and their weightings.
Could this filing influence the crypto ETF landscape?
Yes, analysts say this could spark a “cryptocurrency rush” with more than 200 new products entering the market over the next year.
T. Rowe Price is debuting in the crypto space with a new actively managed ETF filing with the SEC.
The 87-year-old asset manager filed a Form S-1 with the SEC on October 22 to officially launch the Active Crypto ETF.
T. Rowe Price ETF Filing
The fund, aiming to outperform the FTSE Crypto US Listed Index, will trade on the NYSE Arca under a symbol that has not yet been announced.
According to the filing, the ETF will hold between five and fifteen digital assets. They understand Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Ripple (XRP), Dogecoin (DOGE), Cardano (ADA), Avalanche (AVAX), Shiba Inu (SHIB) and Litecoin (LTC), with managers selecting final assets based on market conditions.
To comply with SEC regulations and avoid legal pitfalls that have challenged other crypto projects, managers will only include “eligible assets.”
They will also keep a portion of their holdings in cash, stablecoins, or secure short-term investments, such as bank deposits, to maintain liquidity for operational expenses.
How is this ETF different from others?
According to Reuters, Bryan Armor, an ETF analyst at Morningstar, noted:
“It’s a surprise to see them as a relatively late entrant, but they plan to offer something differentiated to try to break into the space.”
Unlike the wave of single-coin ETF filings, T. Rowe Price’s proposition stands out as a rare actively managed multi-coin fund.
According to the prospectus and a company spokesperson, the fund managers aim to outperform the FTSE Crypto US Listed Index. They will use fundamental analysis, valuation metrics and momentum factors to decide which assets to hold.
Additionally, they will determine how to weight these assets within the portfolio.
Analysts speak out
Reacting to this momentum, Nate Geraci, President of NovaDius Wealth Management, said:
“One cannot overstate the importance of T. Rowe Price filing an actively managed crypto ETF out of left field… T. Rowe is the quintessential legacy asset manager, founded in 1937. They manage approximately $1.8 trillion in assets, but just got involved in ETFs in 2020. Now let’s move on to crypto.”
Echoing a similar sentiment, Eric Balchunas, senior ETF analyst at Bloomberg, added:
“SEMI-SHOCK: T Rowe Price just filed for an active Crypto ETF. They are a Top 5 active manager in terms of assets (mostly mutual funds). I didn’t expect it but I understand. There’s going to be a land rush for this space too.”
Meanwhile, the altcoin market has shown signs of potential recovery, driven by a surge in pending crypto ETP applications, led by Solana, Ripple and Ethereum.
Seeing all this, analysts predict that this could mark the start of a broader “cryptocurrency rush,” with more than 200 products likely to enter the market within a year.
