$1.8 trillion asset manager T. Rowe Price has filed an application for its first crypto exchange-traded fund with the U.S. Securities and Exchange Commission.
Summary
- T. Rowe Price has filed with the SEC to launch its first actively managed crypto exchange-traded fund.
- The proposed ETF will hold five to fifteen digital assets, including Bitcoin, Ether, Solana and XRP.
Founded in 1937, T. Rowe Price is one of the most conservative names in traditional finance, which has now joined a growing list of legacy companies entering the crypto-ETF race, according to an S-1 registration statement with the SEC submitted on October 22.
T. Rowe plans to launch an Active Crypto ETF that would mark a historic shift from its historically mutual fund-focused strategy. According to the filing, the fund expects to hold a basket of digital assets deemed eligible under the SEC’s generic listing standards, with the number of assets being between five and fifteen.
Unlike the single-asset ETFs that have largely been the norm to date, this fund will take an active management approach with allocations based on fundamentals, valuation and momentum rather than solely on market size.
Assets eligible for inclusion in the fund include Bitcoin, Ether, Solana, XRP, Cardano, Avalanche, Litecoin, Dogecoin, Hedera, Bitcoin Cash, Chainlink, Stellar and Shiba Inu.
T. Rowe’s entry into the crypto space came as a surprise to many, but was welcomed by market observers, especially as the entry of such a traditional institution signals a major vote of confidence in the long-term potential of a market that has seen trillions of dollars of outflows in recent weeks, triggered by macroeconomic headwinds and a broader sense of risk aversion.
Bloomberg ETF analyst Eric Balchunas called the move “SEMI-SHOCK,” saying he didn’t expect it.
“There’s going to be a land rush for this space too,” Balchunas said.
T. Rowe entered the ETF space in 2020 with a modest line of stock-based funds, and previously it had focused largely on actively managed mutual funds aimed at long-term investors.
“The fact is, traditional asset managers are quickly trying to figure out how to implement some semblance of a crypto strategy. A number of these firms actually missed the ETF boom. They want to avoid the same mistake with crypto,” added Nate Geraci, president of NovaDius Wealth Management.
In 2021, former T Rowe CEO William Stromberg described crypto as still in its “early stages”, suggesting that while the company was watching the space closely, it was not yet ready to commit. At the time, Stromberg stressed that it would take “years for this to actually come to fruition” and that any involvement would have to be measured and deliberate.
However, cabinet officials have since recalibrated their views. At an ETF conference in Las Vegas earlier this year, Dominic Rizzo, who manages the company’s technology-focused ETF, told Coindesk that now was a good time to consider exposure to Bitcoin.
T. Rowe’s entry into the crypto space comes just after the SEC relaxed its regulatory approach by speeding up the approval process for crypto ETFs. At the same time, the commission has yet to approve any of the multiple altcoin ETF applications for cryptocurrencies like Solana (SOL), XRP (XRP), and Litecoin (LTC), among others.
