New Digital Asset Manager files for First ETF

New Digital Asset Manager files for First ETF

A new digital asset manager has applied for his first ETF to offer a commitment to the S&P 500 Index and at the same time offer limited access to Bitcoin.

The Digital Funds S&P 500 Bitcoin 75/25 Index ETF would invest around 75 % of its assets in large US companies within the S&P 500 Index and about 25 % of its assets in Bitcoin futures contracts.

In the middle of unusual market conditions for Bitcoin futures contracts, the fund can invest in the Grayscale Bitcoin Trust (GBTC) or via Bitcoin ETFs that are traded in other countries, according to the registration states. The ETF does not invest directly in Bitcoin.

Michael Willis, who is supposed to act as a portfolio manager of the ETF, called Bitcoin "Really Volatil" and found that the S&P 500 engagement gives more stability to a Bitcoin portfolio.

"The top value for Wall Street is the S&P 500 Index, and the top value for the digital world is Bitcoin," he said to block works.

"It is our marriage of the two investment ecosystems that are available in two large categories."

A small allocation in Bitcoin has improved the risk-return properties of a diversified portfolio in the past, Nathan Geraci, President of The ETF shop . In view of the volatility of Bitcoin, he added, an appropriate position size and disciplined new weighting were crucial to implement these potential advantages.

geraci compared the ETF proposed by digital funds to the US Equity Plus GBTC ETF (SPBC) from Simplify ETFs, which can invest up to 15 % in GBTC. The fund, which was launched last May, has grown to an administrative assets of around $ 100 million.

"In my opinion there is a limited audience for this type of products because I think that most consultants and investors tend to pursue an independent allocation in Bitcoin," said Geraci. "The ETFs that bundle different asset classes typically have a steep climb to success."

digital assets are "the future"

Willis founded digital funds in December. Previously, he had founded the financial technology company Onefund on Wall Street and has been the senior portfolio manager for the investment fund Index Funds S&P 500 Equal Weight since his laying on in 2015

In front of it, Willis worked in the investment banking industry for UBS Financial Services, Paine Webber and Smith Barney.

The products of digital funds will all focus on investments in digital assets, Willis told Blockworks. The company plans to register some additional products, including a spot bitcoin ETF.

The Securities and Exchange Commission has not yet approved a ETF that would invest directly in Bitcoin, but has allowed those who invest in Bitcoin Futures Contracts. Willis said that he does not expect the agency to approve a spot bitcoin ETF in the foreseeable future.

Nevertheless, Willis said that he expects digital assets to "replace the financial legacy system". Although the first $ 2 trillion of assets that came into the room were largely unregulated, he found that a wave of regulated digital investment products was imminent.

"You have an immediate handling, you have trading around the clock, you have programmable tokens," he said. "It is the future, but we believe that investors are looking for a safe way to get into this area. All of our products are registered with the SEC, and we believe that this is the key to opening up larger assets."

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The contribution New Digital Asset Manager files for the first ETF is not a financial advice.