T. Rowe Price, one of the largest U.S. asset management firms, has filed with the Securities and Exchange Commission (SEC) to launch a cryptocurrency-focused exchange-traded fund (ETF).
The proposed fund, named the T. Rowe Price Active Crypto ETF, aims to outperform the FTSE US Listed Cryptocurrency Index, which tracks the ten largest U.S.-listed cryptocurrencies by market capitalization that meet SEC listing standards.
Unlike passive funds, the ETF can overweight or underweight assets relative to the Index and may invest in crypto not included in it, though all holdings must meet eligibility criteria, according to the SEC filing.
The filing comes as a semi-surprise to market observers. Bloomberg senior ETF analyst Eric Balchunas described it as a “semi-shock,” noting that T. Rowe Price, a top-five active manager largely known for traditional mutual funds, is now entering the nascent but increasingly crowded crypto ETF space.
“There’s going to be a land rush for this space,” he tweeted.
Shares will trade on NYSE Arca. Investors can buy and sell shares like a stock, but it still carries the usual crypto risks.
In the past, Dominic Rizzo, who manages some of T. Rowe Price’s ETFs, has emphasized his belief and long-term conviction in crypto, decentralized finance (DeFi), and stablecoins.
“Over the long run, I think there are going to be plenty of applications that utilize these technologies,” Rizzo said, in reference to crypto.
Crypto and Bitcoin ETFs
Exchange-traded funds have become a popular way for traditional investors to gain exposure to crypto, without holding the assets directly. Bitcoin ETFs offer investors a regulated and accessible way to gain exposure to Bitcoin.
The first U.S. Bitcoin-linked ETF, ProShares Bitcoin Strategy ETF (BITO), launched on October 19, 2021, tracking Bitcoin futures contracts. However, it wasn’t until January 10, 2024, that the U.S. SEC approved the first spot Bitcoin ETFs, allowing funds to directly hold Bitcoin
The largest Bitcoin ETF by assets under management is the iShares Bitcoin Trust (IBIT), managed by BlackRock. IBIT holds over $100 billion in assets, representing over 3% of the total Bitcoin supply.
Other notable spot Bitcoin ETFs include Fidelity’s Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB), each managing billions in assets.
Bitcoin whales are increasingly using ETFs and moving their holdings from cold storage into U.S. spot Bitcoin ETFs, using tax-neutral “in-kind” transactions that convert Bitcoin into fund shares without selling.
This shift integrates Bitcoin into traditional finance, making it easier to borrow against, use as collateral, and include in estate planning, with firms like BlackRock already processing billions in such transfers.
